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Financial Services Law Insights and Observations

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  • Idaho regulator provides updates on agency operations

    State Issues

    On March 26, the Idaho Department of Finance Consumer Finance Bureau (Department) issued updated guidance to its registrants and licensees regarding the Department’s current operations during the Covid-19 outbreak. In particular, the Department noted that though the offices will be closed to the public for the next 21 days, staff are continuing to process licensing and registration applications. The Department suggested that companies may choose to transition their license records to the NMLS to avoid delays. In addition, the Department noted that field examinations continue remotely, using phone and email in lieu of onsite reviews. Finally, the Department indicated deadlines were extended for mortgage companies to file mortgage call reports and financial statements, and that deadlines will be reviewed for required license renewals and reports as needed.

    State Issues Covid-19 Idaho Licensing Call Report Examination

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  • CFPB outlines regulatory flexibility related to Covid-19

    Federal Issues

    On March 26, the CFPB announced several regulatory flexibility measures to help financial companies work with consumers affected by Covid-19. Specifically, the measures postpone certain industry data collections on Bureau-related rules. These include:

    • HMDA. Quarterly information reporting by certain mortgage lenders as required under HMDA and Regulation C will not be expected during this time. However, entities should continue collecting and recording HMDA data in anticipation of making annual submissions. Entities will be provided information by the Bureau on when and how to commence new quarterly HMDA data submissions. (See statement here.)
    • TILA. During this time, annual submissions required under TILA, Regulation Z, and Regulation E “concerning agreements between credit card issuers and institutions of higher education; quarterly submission of consumer credit card agreements; collection of certain credit card price and availability information; and submission of prepaid account agreements and related information” will not be expected. (See statement here.)
    • Section 1071. A survey seeking information from financial institutions on the cost of compliance in connection with pending rulemaking on Section 1071 of the Dodd-Frank Act has been postponed. As previously covered by InfoBytes, under the terms of a stipulated settlement resolving a 2019 lawsuit that sought an order compelling the Bureau to issue a final rule implementing Section 1071, the Bureau agreed to outline a proposal for collecting data and studying discrimination in small-business lending.
    • PACE Financing. A survey of firms providing Property Assessed Clean Energy (PACE) financing to consumers for the purposes of implementing Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act has been postponed.
    • Supervision and Enforcement. The Bureau’s policy statement provides “that it does not intend to cite in an examination or initiate an enforcement action against any entity for failure to submit to the Bureau” specified information related to credit card and prepaid accounts. However, the Bureau’s announcement advises entities to “maintain records sufficient to allow them to make delayed submissions pursuant to Bureau guidance.” With respect to operational challenges facing institutions due to Covid-19, the Bureau states that it will work with institutions when scheduling examinations and other supervisory activities to minimize disruption and burden. “[W]hen conducting examinations and other supervisory activities and in determining whether to take enforcement action, the Bureau will consider the circumstances that entities may face as a result of the [Covid-19] pandemic and will be sensitive to good-faith efforts demonstrably designed to assist consumers,” the announcement states.

    Federal Issues CFPB Agency Rule-Making & Guidance Data Collection / Aggregation Mortgages Data HMDA Credit Cards Prepaid Cards TILA Dodd-Frank PACE Programs Examination Supervision Consumer Finance Covid-19

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  • Nebraska issues guidance regarding examinations during Covid-19 emergency

    State Issues

    On March 25, the Nebraska Department of Banking and Finance (Department) announced it will temporarily halt all regular examinations unless the examination is critical to safety and soundness, consumer protection, or is necessary to address an urgent or immediate need. If the Department already has a majority of the requested information, the institution may elect to move forward with the Department’s examination. The Department will reassess this approach on April 24 or when the emergency has ended, whichever is sooner. 

    State Issues Nebraska Examination Consumer Protection Covid-19 State Regulators

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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 payments and online payments 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 borrowers 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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  • Michigan Department of Insurance and Financial Services issues FAQs for credit unions

    State Issues

    On March 24, the Michigan Department of Insurance and Financial Services issued FAQs for credit unions. The FAQs provide responses to questions regarding continuation of examinations, credit union operations and annual meetings, working with credit union members experiencing hardship due to Covid-19, and reporting requirements.  

    State Issues Insurance Michigan Credit Union Examination Covid-19

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  • Fed recalibrates supervisory activities during Covid-19 pandemic

    Federal Issues

    On March 24, the Federal Reserve (Fed) released a statement regarding adjustments to supervisory activities that the agency is making as a result of Covid-19. Among the changes, the Fed plans to (i) “temporarily reduce its examination activities,” including ceasing regular exam activities for banks with less than $100 billion in assets, unless the exam is critical to safety and soundness or consumer protection, or to address urgent or immediate needs; (ii) conduct all examination activities off-site; (iii) “focus on monitoring and outreach”; (iv) provide an additional 90 days to financial institutions “for resolving non-critical existing supervisory findings”; and (v) “work with financial institutions to understand the specific issues they are facing.” Those institutions subject to the upcoming Comprehensive Capital Analysis and Review must submit their capital plans by April 6.

    Federal Issues Supervision Examination Consumer Protection Federal Reserve Covid-19

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  • Alabama State Banking Department issues Covid-19 guidance

    State Issues

    On March 12, the Alabama State Banking Department (ASBD) issued guidance on pandemic planning and expectations. Among other things, the ASBD expects banks to review, update, and implement business continuity planning, including pandemic planning. It also expects banks to stay informed and updated with reliable information about Covid-19. ASBD also states that it intends to fulfil its essential functions, while limiting risk, by conducting regulatory and examination work off-site as much as possible.

    State Issues Business Continuity Examination Covid-19 Alabama

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  • Texas Department of Savings and Mortgage Lending issues guidance on mortgage examinations

    State Issues

    On March 12, the Texas Department of Savings and Mortgage Lending announced that the Department will begin minimizing on-site mortgage examinations and conducting them off-site to the extent possible.

    State Issues Mortgages Examination Covid-19 Texas

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  • Maryland Commissioner of Financial Regulation issues Covid-19 guidance

    State Issues

    On March 13, the Maryland Commissioner of Financial Regulation issued a bulletin advising that regulated entities should have a comprehensive disaster recovery plan in place that identifies how they will respond to various disasters and emergencies. The bulletin also identifies questions received from regulated entities and the Commissioner’s responses. Specifically, the Commissioner responded to questions regarding working from unlicensed locations, preferred methods of communication with the Commissioner, and notification to the Commissioner if a licensed business is closed because of mass quarantines during any part of an examination.

    State Issues Examination Covid-19 Mortgages Licensing Maryland

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  • OCC issues Comptroller’s Handbook booklet updating deposit-related credit guidance

    Agency Rule-Making & Guidance

    On March 12, the OCC issued Bulletin 2020-14 announcing the revision of the Deposit-Related Credit booklet of the Comptroller’s Handbook that was issued in September 2018. The revised booklet provides guidance for OCC examiners in connection with the examination and supervision of national banks, federal savings associations, and federal branches and agencies of foreign banking organizations that provide small-dollar, unsecured credit products and services such as check credit, overdraft protection, and deposit advance products. The revised booklet includes, among other things, (i) updated guidance following the rescission of OCC Bulletin 2018-28, Deposit-Related Credit: Updated Comptroller’s Handbook Booklet Advance Products (previously covered by InfoBytes here); (ii) changes to OCC issuances, laws, and regulations made since the last booklet; (iii) information explaining the applicability of references to covered savings associations; and (iv) clarifying edits regarding supervisory guidance and sound risk management practices. An appendix containing a sample request letter is also included.

    Agency Rule-Making & Guidance Federal Issues Supervision OCC Examination Comptroller's Handbook Bank Regulatory Small Dollar Lending Unsecured Loans Overdraft Deposit Advance

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