InfoBytes Blog
Filter
Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.
SBA reduces felony look-back to one year for PPP applicants
On June 12, the Small Business Administration (SBA), in consultation with the Treasury Department, released additional revisions to the interim final rule implementing Section 1102 of the CARES Act, which establishes the Paycheck Protection Program (PPP). Specifically, the changes impact the eligibility requirements related to felony convictions of applicants or owners of the applicant. The revisions reduce the look-back period from five years to one year for any felony conviction that does not involve fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance. The ineligibility rule applies to any owner of 20 percent or more of equity in the applicant's business. The revisions are effective immediately and reflected in the updated Borrower Application and Lender Application.
Texas Office of Consumer Credit updates guidance for regulated lenders
On June 12, the Texas Office of the Consumer Credit Commissioner issued updated guidance for regulated lenders navigating the Covid-19 crisis. The guidance: (1) addresses the June 1 due date for filing annual reports; (2) encourages 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) reminds lenders of legal requirements for using electronic signatures; and (4) permits lenders to conduct regulated lending activity from unlicensed locations, subject to certain conditions. The guidance is in effect through July 31, 2020, unless withdrawn or revised
Texas Office of Consumer Credit updates guidance urging motor vehicle sales finance licensees to work with borrowers
On June 12, the Texas Office of the Consumer Credit Commissioner issued an updated advisory bulletin urging motor vehicle sales finance licenses to work with consumers during the Covid-19 crisis (previously covered here and here). Among other measures, the regulator urged licensees to increase consumer communication, work out modifications, waive certain charges, and suspend repossessions. The guidance is in effect through July 31, 2020, unless withdrawn or revised
Senators say PPP loan forgiveness application is unnecessarily burdensome
On June 12, a bipartisan group of senators wrote to the U.S. Treasury Department and the Small Business Administration (SBA) urging revisions to the Paycheck Protection Program’s (PPP) loan forgiveness application. Specifically, the letter requests that the application be “no longer than one page for any loan under $250,000.” The senators note that the CARES Act only requires the forgiveness application to include three items: (i) documentation supporting payroll numbers and pay rates; (ii) documentation supporting mortgage, lease, and utility payments; and (iii) certification that the information is true and correct. While the SBA has the ability to require more documentation, the senators argue that the “11-page forgiveness application” is “beyond the program’s intent” and that it is not only difficult to complete, but it may require businesses to seek costly professional tax advice. The senators acknowledge that for loans above $2 million, intense scrutiny is “an appropriate oversight of taxpayer resources,” but for loans “worth a mere fraction of that,” the lengthy application is a “needless complication to our nation’s economic recovery.”
Details on the PPP loan forgiveness process can be found here.
New Mexico extends authorization for remote notarization
On June 11, the New Mexico governor issued Executive Order 2020-039, which extends Executive Order 2020-015, previously covered here, to continue to permit notarial acts conducted through audio-visual technology, provided certain requirements are met.
Michigan governor extends eviction moratorium
On June 11, the Michigan governor issued Executive Order 2020-118, which extends the state’s eviction moratorium, previously covered here, through June 30. During this period, a person may not be removed or excluded from leased residential premises or residential premises held under a forfeited executory contract, subject to certain exceptions. The executive order also stays any statutory limits on Michigan courts’ ability to adjourn any proceedings, toll any redemption periods or limitations periods, or extend any deadlines until 30 days after the restrictions on eviction expire.
Colorado regulator reminds real estate businesses of business restrictions
On June 11, the Colorado Department of Regulatory Agencies (DORA) issued a reminder regarding the Safer at Home guidance for real estate businesses. In light of the various sources of guidance and versions of public health orders, DORA advises that real estate businesses and professionals review the Safer at Home: Additional Guidance for Real Estate Brokers & Servicers document, which responds to frequently asked questions related to real estate services.
New York Superintendent of Financial Services issues order to assist servicers affected by Covid-19
On June 11, the New York Superintendent of Financial Services issued an order extending the deadline for servicers to meet certain obligations under the updated Servicing Mortgage Loans: Business Conduct Rules (N.Y. Comp. Codes R. & Regs. tit. 3, § 419 et seq.). Specifically, for servicers unable to provide a periodic statement that is compliant with the revised regulations, the order extends the compliance date for a period of 60 days from June 15 to August 14 (extension period). Servicers that cannot comply by June 15 must provide a notice on their website advising consumers that they will be entitled to receive the periodic statement on or shortly after August 14. However, the order notes that servicers that are able to comply with the periodic statement requirements by June 15 should do so as required. The order does not relieve servicers from any obligation to issue a periodic statement under TILA or from ensuring that borrowers receive an accurate accounting of their mortgage loan during the extension eriod.
Kansas extends remote work guidance for certain licensees
On June 11, the Kansas Office of the State Bank Commissioner extended its remote work guidance, previously covered here, for mortgage companies, mortgage loan originators, supervised loan licensees, credit services organizations, money transmitters, and credit notification registrants. Licensed or registered individuals and entities are permitted to work from their residences or a company designated location, provided certain requirements are met, through July 15, 2020.
CFPB releases TRID factsheet and FAQs
On June 9, the CFPB released a factsheet on TRID Title Insurance Disclosures and FAQs regarding lender credits on the total payments disclosure, the optional signature line, and separating consumer and seller information. Highlights of each document include:
- TRID Title Insurance Disclosures. The factsheet discusses the two forms of title insurance commonly purchased in residential transactions—lender’s title insurance and owner’s title insurance. The factsheet breaks down the disclosure rules for each, including, among other things, (i) when and how the costs are required to be disclosed; (ii) specifics regarding simultaneous title insurance; and (iii) differences between state disclosures and TRID disclosures for simultaneous rates. The Bureau also provides detailed disclosure examples for various title insurance scenarios.
- FAQs. The updated FAQs note, among other things, that when providing separate closing disclosures to sellers and consumers, the TRID Rule requires seller-paid loan costs and other costs to be disclosed on page 2 of the consumer’s Closing Disclosure. Additionally, the FAQs provide a breakdown of the Total of Payments disclosure on the Closing Disclosure and discuss when a creditor may require a consumer to sign a Loan Estimate or Closing Disclosure.