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Financial Services Law Insights and Observations

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  • Nebraska to accept in person business filings

    State Issues

    On June 18, the Nebraska secretary of state announced that its Business Services division will be open to the public for business filings, notarizations, and UCC filings. Appointments are required and masks must be worn for in-person appointments.

    State Issues Covid-19 Nebraska Notary

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  • New York Department of Financial Services announces remote online testing for insurance licensing exams

    State Issues

    On June 11, the New York Department of Financial Services announced that remote online proctored testing will be available beginning on June 15, 2020, for all 28 New York insurance licensing exams. As a result, candidates will be able to take exams at a testing center or from their home or office.

    State Issues Covid-19 New York NYDFS Insurance Licensing Insurance Licensing Examination

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  • Missouri extends executive order regarding remote notary services

    State Issues

    On June 11, the Missouri governor issued an executive order extending, among others, Executive Order 20-08 relating to remote notary services, which was previously covered here. The extension permits notarial acts to be performed using audio-video technology, provided certain conditions are met, through August 28.

    State Issues Covid-19 Missouri Notary Fintech

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  • California governor extends time period to submit real estate renewal applications, fees, and continuing education requirements

    State Issues

    On June 15, the California governor issued Executive Order N-69-20, which extends the provisions of the governor’s April 16 executive order, Executive Order N-52-20, and grants an additional 60-day extension to submit real estate license renewal applications, fees, and continuing education requirements. The California Department of Real Estate also updated its FAQs for applicants and licensees regarding Executive Order N-69-20 and Executive Order N-52-20.

    State Issues Covid-19 California Real Estate Licensing

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  • Washington amends and extends proclamations regarding state of emergency, garnishments, and accrual of interest

    State Issues

    On June 18, the Washington governor issued Proclamation 20-49.5, which amends and extends proclamations 20-05 (declaring a state of emergency) 20-49 (regarding garnishments and accrual of interest), 20-49.1 (garnishments and accrual of interest), 20-49.2 (garnishments and accrual of interest), 20-49.3 (garnishments), and 20-49.4 (garnishments). These proclamations were previously covered here and here.  The referenced proclamations are amended to (1) recognize the extension of statutory waivers and suspensions by the Washington Legislature until the termination of the Covid-19 State of Emergency or 11:59 p.m. on July 1, 2020, whichever is first, and (2) similarly extend the prohibitions therein until the termination of the Covid-19 state of emergency or 11:59 p.m. on July 1, 2020, whichever is first.

    State Issues Covid-19 Washington Debt Collection

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  • OCC bulletin discusses preemption and Covid-19

    Federal Issues

    On June 17, the OCC issued Bulletin 2020-62 discussing Covid-19-related relief programs and preemption, reminding stakeholders that banks are governed primarily by federal standards and generally are not subject to state law limitations. While the OCC recognizes the “well-intended” efforts by state and local governments to respond to the economic disruptions caused by the spread of Covid-19, the Bulletin states the agency is “concerned that the proliferation of a multitude of competing requirements will conflict with banks’ ability to operate effectively and efficiently,” which could harm consumers by risking the banks’ safety and soundness. The Bulletin cites to the 1996 Supreme Court decision in Barnett Bank of Marion County v. Nelson to remind stakeholders that federal law preempts state and local laws that prevent or largely interfere with a national bank’s ability to exercise its powers. The Bulletin provides specific examples of the types of state laws that do not apply to banks’ lending and deposit activities, including limitations on (i) terms of credit; (ii) disbursement and repayments; and (iii) processing, originating, and servicing mortgages. Additionally, the Bulletin notes that any state action that limits banks’ foreclosure activities beyond what is required by the CARES Act is preempted by OCC regulations. Lastly, the OCC reminds stakeholders of Bulletin 2020-43, which details its exclusive visitorial authority of banks (covered by InfoBytes here) and encourages banks to “consult with counsel to determine the applicability of any particular state or local law.”

    Federal Issues OCC Preemption State Issues Covid-19

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  • Washington regulator issues guidance on financial performance representations by franchisors

    State Issues

    On June 17, the Securities Division of the Washington Department of Financial Institutions issued a notice to inform franchisors about their obligations regarding representations about historical financial performance. In Washington, franchisors are legally prohibited from selling a franchise using a Franchise Disclosure Document (FDD) that contains an untrue statement of material fact or omits a statement of material fact. The notice indicated that if a franchisor submits FDDs that make historical financial performance representations based on data that predates the Covid-19 pandemic, the division will inquire as to whether this practice complies with federal and Washington requirements.

    State Issues Covid-19 Washington Securities Financial Institutions

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  • New York regulator issues guidance to state financial institutions regarding consumer relief

    State Issues

    On June 17, the New York State Department of Financial Services issued guidance to state-regulated financial institutions, urging them to support consumers that have been negatively impacted by Covid-19. The department urged furnishers of credit information to, among other things, report accommodations reached under the CARES Act as “current,” unless the credit was delinquent prior to the accommodation; report certain Covid-19 related delinquencies as forborne, deferred, or affected by a natural or declared disaster consistent with the furnisher’s treatment of the account; and promptly conduct reasonable investigations of consumer-disputed credit information.

    State Issues Covid-19 New York Consumer Finance Financial Institutions NYDFS CARES Act Consumer Credit

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  • New York regulator issues guidance for state consumer credit reporting agencies

    State Issues

    On June 17, the New York State Department of Financial Services issued guidance to state-regulated consumer credit reporting agencies regarding support for New York consumers impacted by Covid-19. The guidance indicates that all state-regulated consumer credit reporting agencies have agreed to take a number of steps to mitigate consumer harm, including permitting consumers at least one free credit report per month for six months, reminding furnishers of information of the appropriate manner to report accommodations reached pursuant to the CARES Act, and posting on their website a link to a page dedicated to Covid-19 information and updates.

    State Issues Covid-19 New York Consumer Credit Credit Reporting Agency NYDFS

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  • New York enacts legislation on residential mortgage payment forbearance

    State Issues

    On June 17, New York Senate Bill 8243, which relates to the forbearance of residential mortgage payments, was signed into law.  Specifically, SB 8243 requires New York regulated institutions to: (1) make applications for forbearance of any payment due on a residential mortgage on property located in New York “widely available to any qualified mortgagor who, during the covered period, is in arrears or on a trial period plan, or who has applied for loss mitigation  and  demonstrates financial hardship during the covered period;” and (2) grant such forbearance for a period of 180 days to any such qualified mortgagor with an option to extend an additional 180 days.  Such forbearances may be backdated to March 7, 2020.  SB 8243 also sets forth certain requirements for the mortgage forbearances granted under the law, which includes limitations on credit reporting and charging interest and late fees.  The law also provides that adhering to SB 8243 will be a condition precedent to commencing a foreclosure action resulting from a missed payment, which would have otherwise been subject to the law.  However, SB 8243 does not apply to, or affect mortgage loans made, insured, or secured by a United States agency or instrumentality, a government sponsored enterprise, or a federal home loan, or the rights and obligations of any lender, issuer,  servicer  or trustee  of  such  obligations,  including  servicers for the Government National Mortgage Association.

     

    On the same day, New York Senate Bill 8428, which also relates to the forbearance of residential mortgage loans, was signed into the law.  The requirements in SB 8428 are similar to the requirements set forth in SB 8243, except that SB 8428 clarify certain areas of the law including the types of properties subject to the Law, who may receive a forbearance, and when a forbearance extension is warranted.  SB 8428 also clarifies that the obligation to grant the forbearance relief required is subject to the regulated institution having sufficient capital and liquidity to meet its obligations and to operate in a safe and sound manner.  To the extent a regulated institution determines it is unable to offer relief, it must alert the Department of Financial Institutions within five days of making such a determination.

    State Issues Covid-19 New York Mortgages Forbearance Foreclosure GSE Mortgage Servicing

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