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Financial Services Law Insights and Observations


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  • OCC permits remote director, shareholder, and member meetings

    Federal Issues

    On May 26, the Office of the Comptroller of the Currency announced an interim final rule that would permit national banks and federal savings associations to hold all board of director, shareholder and member meetings telephonically or electronically, including after the Covid-19 emergency ends. The OCC also published optional model bylaws for mutual savings associations and federal savings associations to authorize and govern telephonic and electronic meetings. The interim final rule takes effect on May 28, and comments must be received by July 13, 2020.

    Federal Issues Covid-19 OCC Shareholders Directors & Officers Bank Compliance

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  • New York announces New York Forward Loan Fund for small businesses, nonprofits, and small landlords

    State Issues

    New York has announced the creation of the New York Forward Loan Fund (NYFLF), a new state-based loan program to support small businesses, nonprofits, and small landlords (buildings with 50 units or less) in New York as they reopen from Covid-19-related shutdowns. The NYFLF is intended to provide working capital for upfront expenses related to complying with operational guidelines, such as inventory, marketing, and refitting for new social distancing guidelines. The loans will be available to individuals who did not receive a loan from either the U.S. Small Business Administration Paycheck Protection Program or the SBA Economic Injury Disaster Loans for Covid-19 in 2020. The NYFLF loans are interest bearing, are not forgivable, and must be repaid over a five-year term. Pre-applications for the program are being accepted.

    State Issues Covid-19 New York Small Business SBA

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  • Fannie launches Covid-19 resource online portal

    Federal Issues

    On May 26, Fannie Mae announced a new online resource for homeowners and renters titled, “Here to Help,” which compiles tools and resources to assist consumers with financial hardships due to the Covid-19 pandemic. The online portal features videos, fact sheets, and mortgage loan look-up tools for consumers and also provides lenders and servicers with tools to better assist their customers, including explanations of loss mitigation offerings and training videos for loan servicers.

    Federal Issues Covid-19 Fannie Mae Forbearance Loss Mitigation Mortgage Origination Mortgage Servicing

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  • Washington extends proclamation regarding garnishments and accrual of interest

    State Issues

    On May 22, Washington governor Jay Inslee issued Proclamation 20-49.2 amending and extending proclamations 20-05 (declaring a state of emergency) and 20.49, and 20.49.1 (regarding garnishments and accrual of interest) until the earlier of the termination of the Covid-19 state of emergency or 11:59pm on May 27. Proclamations 20.49 and 20.49.1 were previously covered here and here.

    State Issues Covid-19 Washington Debt Collection Interest

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  • Idaho Department of Finance extends work from home guidance for its licensees and registrants

    State Issues

    On May 22, the Idaho Department of Finance extended temporary work from home guidance previously issued to Idaho mortgage brokers and lenders, mortgage loan originators, regulated lenders, title lenders, payday lenders, and collection agency licensees and registrants. The original guidance, previously covered here, permits employees to work from home where the residence is not a licensed branch. The guidance is extended through September 1, 2020.

    State Issues Covid-19 Idaho Licensing Mortgage Broker Broker-Dealer Mortgage Lenders Loan Origination Mortgage Origination Title Loans Payday Lending Debt Collection

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  • Arkansas Securities Department extends work from home guidance for mortgage loan officers

    State Issues

    On May 22, the Arkansas Securities Department extended interim regulatory guidance previously issued to licensed mortgage companies, mortgage loan officers, and branch managers. The original interim regulatory guidance, previously covered here, permits mortgage loan officers to conduct activities requiring a license from home, provided certain data security provisions are met. This guidance is extended through September 1, 2020.

    State Issues Covid-19 Arkansas Securities Mortgages Mortgage Lenders Licensing

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  • Indiana updates notary public requirements

    State Issues

    Indiana Secretary of State Connie Lawson issued an announcement highlighting new laws and regulations regarding continuing education for notaries public, remote notary authorization, and criminal history record checks for notaries public. As of March 31, active notaries public can receive authorization to conduct remote notarizations if they submit an application, complete an educational course, pay a $100 fee, and contract with an approved technology vendor. The new laws relating to continuing education and criminal history record checks take effect on July 1.

    State Issues Covid-19 Indiana Notary Fintech

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  • OFAC designates Iran’s interior minister and senior law enforcement officials for human rights abuses

    Financial Crimes

    On May 20, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), pursuant to Executive Order 13553, sanctioned Iran’s interior minister, in addition to seven senior officials of Iran’s Law Enforcement Forces (LEF), a provincial commander of Iran’s Islamic Revolutionary Guard Corps, and a foundation along with its director and members of the board of trustees, for serious human rights abuses against Iranians. According to OFAC, the foundation is controlled by LEF and plays an active role in Iran’s energy, construction, services, technology, and banking industries. As a result of the sanctions, “all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC further noted that its regulations “generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons,” and warned foreign financial institutions that knowingly facilitating significant transactions or providing significant financial services to the designated individuals may subject them to U.S. correspondent account or payable-through sanctions.

    Financial Crimes OFAC Sanctions Department of Treasury Of Interest to Non-US Persons Iran

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  • District court: Initial debt collection communication via email does not violate FDCPA


    On May 19, the U.S. District Court for the Northern District of California granted a debt collector’s motion to dismiss a lawsuit with prejudice brought by a plaintiff alleging violations of the Electronic Signatures in Global Commerce (E-SIGN) Act and the FDCPA. The defendant sent an email to the plaintiff attempting to collect an unpaid debt that contained a validation notice. The plaintiff argued that the email violated the E-SIGN Act because she did not consent to receive email from the defendant, and that it also violated the FDCPA “because the email referred to ‘send[ing]’ a copy of the verification of the debt whereas § 1692g(a)(4) specifies that a copy of the verification will be ‘mailed.’” Among other arguments, the plaintiff claimed that the email’s subject line, which stated “This needs your attention,” violated the FDCPA because it did not convey that the message was seeking to collect a debt, and that she received several more emails during the validation period, which confused her and “overshadowed” the validation notice in the initial communication.

    The court disagreed, stating that because there are “no express restrictions” within the FDCPA about how the initial communication must be made, allowing it to be made electronically is a “reasonable argument.” Specifically, the court noted that the CFPB has recognized that certain communication technologies such as email did not exist when the FDCPA was passed, and referred to the Bureau’s commentary on its proposed debt collection rule that stated “a validation notice as part of an initial communication can be conveyed via email.” [Emphasis in the original.] The court also determined that the plaintiff lacked standing with respect to her claim that the initial email’s subject line violated the FDCPA since she opened the email and clicked on the link. Furthermore, the court noted that using the word “send” instead of “mailed” in the initial communication would not have confused the least sophisticated debtor because the “debtor, if concerned about getting a verification of debt via email, could always ask for a copy to be sent via physical mail instead.”

    Courts FDCPA E-SIGN Act Debt Collection CFPB

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  • CFTC issues new civil monetary penalty guidance

    Agency Rule-Making & Guidance

    On May 20, the CFTC’s Division of Enforcement issued new civil monetary penalty guidance—the first such public issuance since 1994. The guidance, which has been incorporated into the Division’s Enforcement Manual, outlines a three-pronged approach enforcement staff will apply when evaluating the appropriate penalty for recommendation to the Commission: (i) “the gravity of the violation,” which may include the nature and scope of a violation, a respondent’s role in the violation, whether the conduct was intentional or willful, and the nature and scope of any consequences resulting from the violations; (ii) “mitigating and aggravating circumstances,” such as a respondent’s post-violation conduct, whether the respondent self-reported the misconduct, the extent of cooperation and remediation, and a respondent’s prior misconduct; and (iii) “other considerations,” including factors such as timely settlements and remedies and monetary relief to be imposed in parallel actions by other criminal authorities or self-regulatory agencies and organizations. “In applying the various factors, staff will be guided by the overarching consideration of ensuring that any proposed penalty achieves the dual goals of specific and general deterrence,” CFTC Director of Enforcement James McDonald stated.

    Agency Rule-Making & Guidance CFTC Enforcement Civil Money Penalties

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