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Texas Office of Consumer Credit issues revised emergency bulletin for lenders
On April 16, the Texas Office of Consumer Credit issued a revised bulletin outlining emergency guidance for regulated lenders navigating the Covid-19 crisis. The guidelines: 1) extended due date for filing annual reports from May 1 to June 1; 2) encouraged lenders to work with consumers, including by working out modifications to assist with payments, waiving fees and charges, suspending charged-off accounts, and suspending repossessions of collateral or foreclosure of real property, among other things; 3) reminded lenders of legal requirements for using electronic signatures; and 4) permitted lenders to conduct regulated lending activity from unlicensed locations, subject to certain conditions.
Agencies to hold webinar for bankers on loan modifications and reporting
On April 16, the FDIC released FIL-46-2020, announcing a webinar to provide accounting and reporting guidance for bankers pursuant to Section 4013 of the CARES Act and the revised Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (covered by InfoBytes here). The webinar is scheduled for Friday, April 24 at 3:00 pm EDT and will be jointly hosted by the FDIC, the Federal Reserve, the OCC, and the NCUA. Participants are encouraged to email questions prior to the webinar to asktheregulators@stls.frb.org. To register for the webinar, click here.
CFPB to host conference call on Covid-19 financial issues
On April 16, the CFPB published notices in the Federal Register announcing that the Bureau’s four advisory boards will host a May 1 combined open conference call to address the Covid-19 pandemic’s effects on consumers. The first half of this public meeting, which is scheduled to begin at 2:00 pm EDT, will focus on Covid-19’s impact on consumers and the financial marketplace, and the second half will focus on the impacts on specific consumer groups, including older individuals, students, servicemembers, and underserved individuals. Participants may email questions to the advisory boards at least seven days prior to the call date here. RSVPs must be submitted by April 30 here.
For additional information, see the Federal Register notice for the Consumer Advisory Board here, for the Credit Union Advisory Council here, for the Community Bank Advisory Council here, and for the Academic Research Council here.
Nebraska attorney general issues warning about garnishing stimulus payments
On April 15, Nebraska Attorney General Doug Peterson warned that Nebraska law exempts certain income and property of low-income consumers from execution and attachment by creditors and debt collectors. The attorney general also warned that any attempt or threat to garnish or attach CARES Act stimulus funds that are exempt under Nebraska law will be considered an unfair trade practice under Nebraska’s Consumer Protection Act. Finally, the attorney general stated that his office is diligently monitoring consumer complaints, and encouraged consumers to file complaints if they experience aggressive debt collection during the Covid-19 crisis.
FDIC updates Covid-19 FAQs for financial institutions
On April 15, the FDIC released updates to its list of Covid-19 frequently asked questions (FAQs) for financial institutions. The FAQs were originally released on March 19, covering bank operational issues and urging banks to work with borrowers who are experiencing payment difficulties due to Covid-19, as reported by InfoBytes here. New FAQs discuss credit reporting of payment accommodations, reminding lenders to report borrower accounts as current, provided the borrowers continue to observe the terms of the accommodations. The guidance also points financial institutions to a recent CFPB statement (covered here) for guidance on the FCRA under the CARES Act. The FDIC also updated the Troubled Debt Restructurings (TDRs) guidance, emphasizing that financial institutions do not need to classify Covid-19 borrower payment accommodations as TDRs if certain criteria are met, and that examiners “will not criticize prudent efforts to modify the terms on existing loans to affected customers.” Other updates to the FAQs include, among other things: (i) obligations to obtain updated real estate valuation information for Covid-19 related loan modifications; (ii) the use of alternative signatures for Part 363 annual reports and other notices; (iii) real estate loans in excess of loan-to-value percentages for loans refinanced by borrowers impacted by Covid-19; (iv) risk-based capital rules regarding multi-family loan modifications; (v) eligible Community Reinvestment Act activities during the Covid-19 pandemic; and (vi) Bank Secrecy Act issues regarding filing requirements, raising compliance challenges with FinCEN, and whether loans under the Small Business Administration’s Paycheck Protection Program are considered new accounts for customer due diligence purposes.
CFPB releases resources for servicemembers affected by Covid-19
On April 15, the CFPB issued a blog post providing resources for servicemembers, veterans, and military families impacted by the Covid-19 pandemic. The Bureau discusses military aid societies where servicemembers and military families can apply for emergency grants and zero-interest loans, and hardship duty pay and other allowances afforded to military families affected by the Stop Movement Order that halted domestic travel by military personnel. The Bureau also provides information for managing mortgage payments and student loans, and reminds active-duty servicemembers, military spouses and National Guard personnel and reservists on active duty for more than 30 consecutive days of their rights under the Servicemembers Civil Relief Act and the Military Lending Act. These will include being able to terminate contracts under certain conditions and to receive protections for many types of consumer credit and loans. The blog post also highlights recent changes made to existing programs due to challenges presented by Covid-19, including the expansion of online access for veterans to file benefit claims and the continuation of GI Bill program funding.
Brown and Waters urge housing market stability during Covid-19 pandemic
On April 15, Senator Sherrod Brown (D-OH) and Congresswoman Maxine Waters (D-CA) sent a letter to Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven T. Mnuchin urging the agencies to use the authority granted under Title IV of the CARES Act to meet the needs of the housing market and ensure the stability of nonbank mortgage servicers as homeowners and renters struggle to make timely mortgage and rent payments. Brown and Waters stress that the “government must be prepared to respond quickly to prevent a liquidity shortfall in the single-family and multifamily mortgage markets, and to ensure that consumers are equitably served by that response.” They caution that while Ginnie Mae has announced measures to meet its servicers’ liquidity needs (covered by InfoBytes here), these changes “may be insufficient to address all of the liquidity challenges.”
Washington governor issues temporary moratorium on garnishments and accruals of interest
On April 14, Washington Governor Jay Inslee issued an executive order temporarily prohibiting certain garnishments and accruals of interest statewide. Governor Inslee noted that garnishments and other collect judgments could hinder consumers from paying for basic necessities, thereby, endangering the lives of individual consumers and risking further negative impacts on public health. Inslee’s statewide order is in place through May 14.
Virginia requires licensure of debt settlement service providers
On April 7, the Virginia governor signed HB 1553, which outlines licensing and regulatory requirements for debt settlement services providers. Among other things, HB 1553 specifies that all debt settlement services providers must be licensed by the state, must file a bond with the state commissioner, and must comply with outlined record retention, reporting, and examination requirements. HB 1553 also outlines prohibited conduct, including prohibiting licensees from accepting a fee from a consumer prior to providing the requested debt settlement service, or from using false, misleading, or deceptive advertisements in connection with the offered services. HB 1553 also provides for cease and desist orders and civil penalties to be issued against licensees that violate these requirements, grants consumers a private right of action against licensees, and makes a violation a prohibited practice under the Virginia Consumer Protection Act. Additionally, the State Corporation Commission is directed to “establish a procedure, to be in effect by March 1, 2021, for any person to apply, prior to July 1, 2021, for a license” that will take effect when HB 1553’s requirements become effective on July 1, 2021.
FDIC encourages relief for Oregon borrowers affected by severe weather
On April 10, the FDIC issued FIL-42-2020 to provide regulatory relief to financial institutions and help facilitate recovery in areas of Oregon affected by a recent series of severe weather. In the letter, the FDIC encourages institutions to consider, among other things, (i) extending repayment terms; (ii) restructuring existing loans; or (iii) easing terms for new loans to borrowers affected by the severe weather, provided the measures are “done in a manner consistent with sound banking practices, can contribute to the health of the local community and serve the long-term interests of the lending institution.” Additionally, the FDIC notes that institutions may receive Community Reinvestment Act consideration for community development loans, investments, and services in support of disaster recovery. The FDIC states it will also consider regulatory relief from certain filing and publishing requirements.
Find continuing InfoBytes coverage on disaster relief guidance here.