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Financial Services Law Insights and Observations

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  • Massachusetts DOB instructs licensees on temporary branch closures

    State Issues

    On March 19, the Massachusetts Division of Banks issued guidance to licensees for temporary closures necessitated by Covid-19. Licensees are encouraged to provide alternative service options to customers when feasible and notify customers about closures and alternatives as soon as practicable. In addition, licensees should notify the Division of any closures, business disruptions or other significant Covid-19-related developments, including significant staff or liquidity shortages or issues with funding closed loans to consumers.

    State Issues State Regulators State Regulation Licensing Liquidity Standards Covid-19 Massachusetts

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  • Massachusetts DOB issues guidance to assist consumers affected by Covid-19

    State Issues

    On March 15, the Massachusetts Division of Banks issued guidance for financial institutions on working with consumers affected by Covid-19 and regulatory assistance available from the Division. The Division encourages financial institutions to work with affected customers and communities, including by: (i) waiving fees; (ii) increasing ATM cash withdrawal limits; (iii) easing restrictions on cashing checks; (iv) increasing credit card limits; and (v) offering payment accommodations to assist members having payment difficulty. The guidance notes that “prudent efforts” to modify loan terms would not be subject to examiner criticism, and institutions can ease their terms for new loans consistent with prudential banking practices. In the guidance, the Division also committed to work with affected institutions to reduce the burden when scheduling examinations and inspections, utilize off-site reviews, and work with institutions experiencing difficulties fulfilling reporting requirements. It further acknowledged that institutions may need to temporarily close facilities and encouraged them to offer alternative service options where practical and notify the Division regarding business disruptions or other significant developments, such as staff shortages, rapid withdrawal of deposits or other signs of erosion in consumer confidence.

    State Issues State Regulation Financial Institutions Massachusetts Loan Modification Covid-19

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  • Massachusetts DOB reminds licensees of requirement for pandemic planning

    State Issues

    On March 11, the Massachusetts Division of Banks issued a reminder to licensees to have business continuity plans that address the circumstances of a pandemic outbreak. The Division further advised licensees that it does not require an MLO’s home to be licensed as a branch so long as they do not advertise it as an office or meet consumers there and that it would permit other licensees to work from home, if feasible, subject to the same requirements.

    State Issues Massachusetts MLO State Regulation Business Continuity Licensing Covid-19 Mortgages

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  • Massachusetts DOB issues expectations for relief to mortgage borrowers

    State Issues

    On March 25, the Massachusetts Division of Banks (DOB) issued a memorandum to financial institutions, mortgage lenders, and mortgage loan servicers outlining the actions the DOB “fully expects” institutions will take to alleviate the impact of Covid-19 on mortgage borrowers. The actions include (i) postponing foreclosures for 60 days; (ii) forbearing payments for 60 or more days; (iii) waiving fees for late payment and online payment for at least 60 days; (iv) refraining from reporting late payments to credit rating agencies for 60 days; (v) offering an additional 60-day grace period for borrower to complete trial loan modifications; (vi) ensuring borrowers do not experience a disruption of service if a mortgage servicer closes its office; and (vii) proactively reaching out to borrowers to explain the assistance being offered. The memorandum also emphasizes that reasonable and prudent efforts to assist borrowers are consistent with safe and sound banking practices and will not be subject to examiner criticism.

    State Issues State Regulation Massachusetts Financial Institutions Mortgage Lenders Mortgage Servicing Mortgages Consumer Lending | Consumer Finance Examination Covid-19

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  • Louisiana Commissioner of Financial Institutions advises non-depository institutions on temporary closures

    State Issues

    On March 18, Louisiana’s Commissioner of Financial Institutions released emergency advisories for non-depository institutions, specifically repossession agents and bond for deed escrow agents, check cashers, pawnbrokers, licensed consumer lenders/brokers, and residential mortgage lenders. The advisories authorized the temporary closure or relocations of licensed locations and waived the standard 30-day notice requirement for such closures. Licensees should notify the Office of Financial Institutions as soon as possible regarding any temporary closures or relocations and may submit requests for waiver of the standard change of location fee by email. Unless otherwise instructed, temporary location changes should not be submitted through NMLS.  In addition, the advisory for residential mortgage lenders confirms that licensed MLOs may work from their homes.

    State Issues Louisiana Non-Depository Institution Check Cashing Repossession Bond Covid-19

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  • Louisiana issues guidance on branch closures due to Covid-19

    State Issues

    On March 16, Louisiana’s Commissioner of Financial Institutions issued an emergency declaration granting financial institutions temporary authority to close branches within the state or to limit hours, reduce functions, or close certain days of the week. The declaration expressly waives the standard requirements for branch closures and instead instructs institutions to post a notice for public view at the physical location and provide email notice to the Office of Financial Institutions as soon as practicable and no more than five days after closure. 

    State Issues Louisiana Financial Institutions Covid-19 State Regulation

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  • Indiana amends certain financial institution and consumer credit provisions

    State Issues

    On March 18, the Indiana governor signed House Enrolled Act No. 1353, which amends various provisions concerning financial institutions and consumer credit, including those related to first lien mortgage lenders, credit unions, and surety bond requirements for licensed mortgage loans originators, pawnbrokers, and money transmitters, among others. Among other things, the act also amends a provision in the state statute governing credit unions, which provides that loans made by a credit union to the credit union’s individual officers (and to the immediate family members of an officer, director, or supervisory committee member) must be made in accordance with Regulation O of the Federal Reserve Board. The act also stipulates that required appraisals connected to mortgage loans made to credit union members must be “consistent with the appraisal standards and transaction value limitations” outlined in the National Credit Union Administration’s appraisal regulations. The amendments take effect July 1.

    State Issues State Legislation Consumer Credit Mortgage Lenders Federal Reserve NCUA Regulation O Appraisal

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  • Special Alert: California governor releases Covid-19 relief package

    State Issues

    On March 25, California Governor Gavin Newsom announced a financial relief package (Proposal) and related guidance to assist borrowers in California experiencing financial hardship as a result of the Covid-19 outbreak. According to the news release, the relief efforts are being supported by several of the nation’s largest national banks, as well as by nearly 200 state-chartered banks, credit unions, and other servicers operating in California (Participating Financial Institutions). Under the Proposal, California borrowers of residential mortgage loans may be eligible for relief with respect to mortgage payments, credit reporting, foreclosures, evictions, and late fees and charges.

    ***

    Click here to read the full special alert

    If you have any questions regarding California’s financial relief package, or other related issues, please contact a Buckley attorney with whom you have worked in the past. You can also visit our Covid-19 News & Resources page for a compendium of issuances by federal and state agencies, as well as GSEs and other sources.

    State Issues Special Alerts Consumer Finance Mortgages Foreclosure Covid-19

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  • NYDFS provides emergency relief to consumers

    State Issues

    On March 24, NYDFS issued an emergency regulation providing financial relief to New Yorkers affected by Covid-19. Among other things, New York regulated institutions must (i) make applications for forbearance of any payment due on a residential mortgage of a property located in New York, widely available to any individual who resides in New York and who demonstrates financial hardship as a result of the Covid-19 pandemic; and (ii) subject to the safety and soundness requirements of the regulated institution, grant such forbearance for a period of 90 days to any such individual. New York regulated banking organizations must also provide certain financial relief to individuals who can demonstrate financial hardship, including eliminating fees charged for use of certain ATMs, overdraft fees, and credit card late payment fees. The regulations also establish requirements for institutions regarding the criteria for individuals to qualify for relief, application processing, and record retention, including expedited timelines to process applications for relief.

    State Issues Covid-19 New York NYDFS Consumer Finance

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  • Pennsylvania expands stay at home order to include Erie County

    State Issues

    On March 24, the Pennsylvania governor extended Pennsylvania’s stay at home order to Erie County. The stay at home order previously only applied to certain other Pennsylvania counties.

    State Issues Covid-19 Cities & Counties Pennsylvania

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