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FDIC provides relief from audit, reporting requirements triggered by stimulus-related asset growth
On October 20, the FDIC issued an interim final rule providing regulatory relief to insured depository institutions (IDIs) that have experienced significant, but temporary, asset growth due to government stimulus efforts. Previously, an IDI would be subject to annual independent audit and reporting requirements in any fiscal year in which its assets at the start of the year were $500 million or more. The interim rule permits IDIs to determine if they are subject to these requirements for fiscal years ending in 2021 based on their consolidated total assets as of December 31, 2019, or as of the beginning of their fiscal years ending in 2021, whichever is less. However, the rules also permit the FDIC to require IDIs to comply with the audit and reporting requirements if asset growth was related to a merger or acquisition. The rule will remain in effect through December 31, 2020, unless extended.
FHA extends deadline for Covid-19 loss mitigation options
On October 20, FHA announced that homeowners experiencing a Covid-19 financial hardship with FHA-insured mortgages can request an initial forbearance or a Home Equity Conversion Mortgage (HECM) extension through December 31. Specifically, Mortgagee Letter 2020-34 extends the date by which mortgagees must approve the initial Covid-19 forbearance or Covid-19 HECM extension originally provided for in ML 2020-06 and expanded in ML 2020-22 (covered by InfoBytes here and here). FHA notes that due to the continued Covid-19 pandemic and its impact on borrowers around the country, the agency is extending the deadline through December 31 from the original deadline of October 30.
New York governor extends suspension of eviction orders
On October 20, the New York governor issued an executive order extending the state’s moratorium on commercial evictions and foreclosures related to Covid-19 until January 1, 2021. For previous coverage, see here, here and here.
New Mexico renews Covid-19 Health Emergency and impacted executive orders through November 13
On October 16, the New Mexico governor issued an executive order renewing and extending the public health emergency until November 13, 2020. The executive order also extends the duration of Executive Order 2020-039 (previously covered here and here) to continue to permit notarial acts conducted through audio-visual technology, provided certain requirements are met.
Maryland issues new executive order regarding foreclosures and repossessions
On October 16, 2020, the Maryland governor issued Executive Order 20-10-16-01 to amend and restate an April 3 executive order regarding foreclosures and repossessions (previously covered here). The executive order, among other things: (i) suspends requirements regarding the repossession of any chattel home by self-help until the state of emergency is terminated; (ii) suspends the sale of certain properties unless certain notices are provided, (iii) suspends the operation of the commissioner’s Notice of Intent to Foreclose Electronic System, and discontinues acceptance of Notices of Intent to Foreclose until January 4, 2021, and (iv) suspends any judgment for possession or repossession, or warrant for restitution of possession or repossession of residential, commercial, or industrial real property, if the tenant can demonstrate that he/she suffered a substantial loss of income resulting from Covid-19 or related events. Maryland’s commissioner of financial regulation issued a Foreclosure Update and Repossession Update outlining the executive order.
Illinois reissues and extends several Covid-19 executive orders
On October 16, the Illinois governor issued Executive Order 2020-59, which extends several earlier executive orders through November 14, 2020 (previously covered here, here, and here). Among other things, the order extends: (i) Executive Order 2020-07 regarding in-person meeting requirements, (ii) Executive Order 2020-23 regarding actions by individuals licensed by the Illinois Department of Financial and Professional Regulation engaged in disaster response, (iii) Executive Order 2020-25 regarding garnishment and wage deductions (previously covered here), and (iv) Executive Order 2020-30 regarding residential evictions (previously covered here and here).
CFPB, FTC argue ECOA “applicant” includes those with existing credit
On October 7, the CFPB and the FTC (collectively, “agencies”) filed an amici curiae brief with the U.S. Court of Appeals for the Second Circuit in an action addressing “whether a person ceases to be an ‘applicant’ under ECOA and its implementing regulation after receiving (or being denied) an extension of credit.” According to the brief, a consumer filed suit against a national bank for allegedly violating ECOA and Regulation B’s adverse-action notice requirement when it closed his line of credit and sent an email acknowledging the closure without including (i) “‘the address of the creditor,’” and (ii) “either a ‘statement of specific reasons for the action taken’ or a disclosure of his ‘right to a statement of specific reasons.’” The district court dismissed the action after adopting the magistrate judge’s Report and Recommendation recommending that the bank’s motion be granted without prejudice to plaintiff, who had leave to brief the court on whether an amended complaint should be permitted.
The agencies disagreed with the district court and filed the amici brief on behalf of the applicant. Specifically, the agencies argue that ECOA’s protections apply to any aspect of a credit transaction, including those who have an existing arrangement with a creditor, noting there is “‘no temporal qualifier in the statute.’” According to the agencies, ECOA has provisions that cover the revocation of credit or the change in credit terms, and therefore, those provisions “would make little sense if ‘applicants’ instead included only those with pending requests for credit.” Moreover, the agencies argue that the district court’s interpretation of “applicant” would “curtail the reach of the statute,” and introduce a large loophole. Lastly, the agencies assert that the legislative history of ECOA supports their interpretation, such as the addition of amendments covering the revocation of credit, and most notably, Regulation B’s definition of “applicant,” which includes those who have received an extension of credit.
FINRA postpones in-person arbitrations and mediations until 2021
Recently, FINRA announced that all in-person arbitration and mediation proceedings will be postponed until January 1, 2021, except in certain specified circumstances. In particular, a proceeding may occur prior to that date: (1) if all parties to the arbitration or mediation agree to proceed in-person and the participants comply with state and local health orders; (2) if a panel orders that the arbitration or mediation take place telephonically or by Zoom; or (3) the parties stipulate that the proceeding may take place telephonically or by Zoom.
California modifying CCPA regs again
On October 12, the California Department of Justice released a third set of proposed modifications to the regulations implementing the California Consumer Privacy Act (CCPA). As previously covered by InfoBytes, on August 14, the regulations went into effect after being approved by the Office of Administrative Law (OAL). Highlights of the proposed modifications include:
- The addition of Section 999.306, subd. (b)(3), which provides illustrative examples of the methods businesses can use to provide the notice of right to opt-out of the sale of personal information through an offline method, when the business collects personal information in the course of interacting with consumers offline. Examples include: posting signage in the area where personal information is collected or providing the notice orally during calls where information is collected;
- The addition of Section 999.315, subd. (h), which provides illustrative examples of right to opt-out methods that are designed with the purpose or have the substantial effect of subverting or impairing a consumer’s choice to opt-out. Examples include: using double negatives or requiring consumers to click through a list of reasons why they should not opt-out before confirming their request;
- Amending Section 999.326, subd. (a), which clarifies what proof a business may require from an authorized agent and consumer when a consumer uses an agent to submit a request to know or a request to delete; and
- Amending Section 999.332, subd. (a), which clarifies that businesses subject to § 999.330 (consumers under 13 years of age) and/or § 999.331 (consumers 13 to 15 years of age) must include a description of the processes set forth in those section in its privacy policy for consumers under 16 years of age.
Comments on the proposed modifications are due on October 28 by 5:00 p.m.
Financial Stability Board outlines global stablecoin recommendations
On October 13, the Financial Stability Board (FSB) published a report providing high-level recommendations for the regulation, supervision, and oversight of “global stablecoin” (GSC) arrangements. FSB defines “stablecoins” as a “specific category of crypto-assets which have the potential to enhance the efficiency of the provision of financial services, but may also generate risks to financial stability, particularly if they are adopted at a significant scale.” GSCs are those with multi-jurisdictional reach that “could become systemically important in and across one or many jurisdictions, including as a means of making payments.” The report, Regulation, Supervision, and Oversight of “Global Stablecoin” Arrangements, follows an analysis of financial stability risks raised by GSCs as well as a survey of FSB and non-FSB members’ approaches to stablecoins. Prior to issuing the report, FSB also conducted several outreach meetings with representatives from regulated financial institutions, fintech firms, academia, and the legal field. The October report, which takes into account public feedback received earlier in the year, outlines 10 high-level recommendations that “call for regulation, supervision and oversight that is proportionate to the risks, and stress the value of flexible, efficient, inclusive, and multi-sectoral cross-border cooperation, coordination, and information sharing arrangements among authorities that take into account the evolving nature of GSC arrangements and the risks they may pose over time.” However, the report stresses that because these recommendations primarily address financial stability risks, issues such as anti-money laundering/combating the financing of terrorism, data privacy, cyber security consumer and investor protection, and competition are not covered. These issues, which may present consequences for financial stability if not properly addressed, should be incorporated as part of a comprehensive supervisory, regulatory, and oversight framework, the report states.
Among other things, the report also provides regulatory authorities a guide “of relevant international standards and potential tools to address vulnerabilities arising from GSC activities,” and outlines a timeline of actions that will build a roadmap to ensure “any relevant international standard-setting work is completed.”