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  • Oregon amends debt collection statute to expand coverage to debt buyers

    State Issues

    On April 3, the Oregon governor signed SB 1553, which amends Oregon’s debt collection laws to provide that a debt buyer (or a debt collector acting on a debt buyer’s behalf) engages in unlawful collection practice if it collects or attempts to collect a debt without providing a debtor, within 30 days of their request, documents which establish the nature and amount of debt.

    State Issues Debt Collection State Legislation

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  • Buckley Sandler Special Alert: New Jersey’s Office of Attorney General creates “state-level CFPB”

    State Issues

    New Jersey Attorney General Gurbir Grewal said in a press release last week that he and Governor Phil Murphy would “fill the void left by the Trump Administration’s pullback of the Consumer Financial Protection Bureau” by creating what the release referred to as a “state-level CFPB.”

    The effort includes the nomination of Paul R. Rodriquez as director of the New Jersey Division of Consumer Affairs, which enforces laws to protect consumers’ rights, regulates the securities industry, and oversees numerous state-licensing boards. Rodriguez, who is currently Acting Counsel to New York City Mayor Bill de Blasio, will start in his new role on June 1.

    * * *

    Click here to read the full special alert.

    If you have any questions about the initiative or other related issues, please see our State Attorneys General practice, whose lawyers have been defending AG enforcement actions for more than two decades, or contact Douglas Gansler or any Buckley Sandler attorney with whom you have worked in the past.

    State Issues CFPB State Attorney General CFPB Succession Enforcement

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  • States pass bills amending security freeze laws

    State Issues

    On March 29, the Colorado governor signed HB 1233, which authorizes a parent or legal guardian to request a credit reporting agency place a security freeze on a protected consumer’s credit file; the law defines protected person to include a minor under 16 years of age or an individual who is a ward of the legal guardian. According to HB 1233, if no credit file exists for the protected consumer, the credit reporting agency is required to create a record and then initiate the security freeze on such record without charge. Additionally, among other things, the law prohibits the charging of a fee for the “placement, temporary lift, partial lift, or removal of a security freeze” on a protected consumer’s credit file and allows for a protected consumer to remove the security freeze if they demonstrate the representative’s authority is no longer valid. HB 1233 becomes effective on January 1, 2019.

    On March 30, the Kentucky governor signed HB 46, which updates Kentucky’s security freeze law to, among other things, allow a consumer to request a security freeze by methods established by the credit reporting agency in addition to written notification, and remove the requirement that a security freeze expire after seven years. The law continues to allow for a charge of up to ten dollars for the placement, temporary lift, or removal of a security freeze unless the consumer is a victim of identity theft and provides the credit reporting agency with a valid police report. The law is effective immediately, as the text notes that security breaches and the risk of identity theft are on the rise.

    State Issues State Legislation Security Freeze Data Breach Privacy/Cyber Risk & Data Security Credit Reporting Agency

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  • Washington expands the state’s Service Member’s Civil Relief Act

    State Issues

    On March 22, the Washington governor signed HB 1056, which amends the Washington Service Member’s Civil Relief Act (WSCRA) to update the definition of “service member” and allow for a service member to terminate or suspend certain private contracts without penalty. Specifically, HB 1056 defines “service member” as “an active member of the United States armed forces, a member of a military reserve component, or a member of the national guard who is either stationed in or a resident of Washington state.” The law allows for a service member, after receiving orders for a permanent change of station or deployment (for at least 30 days), to terminate or suspend certain contracts for the following: telecommunication services, internet services, health studio services, and subscription television services. After proper written notice is given to the service provider for termination, suspension or reinstatement, the service member may not be charged a “penalty, fee, loss of deposit, or any other additional cost” due to the notice. Additionally, HB 1056 allows the Washington Attorney General to recover costs and fees in an action brought to enforce the WSCRA. The law becomes effective on June 7.

    State Issues SCRA Servicemembers State Legislation State Attorney General

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  • Multiple states pass bills addressing GAP waiver framework

    State Issues

    On March 28, HB 4186, which amends the Code of West Virginia by adding a section related to guaranteed asset protection waivers (GAP waivers), became law without the governor’s signature. Among other things, HB 4186 clarifies that GAP waivers are not insurance, and that GAP waivers issued after the bill’s effective date are exempt from West Virginia insurance laws. The bill also (i) specifies terms and conditions when offering GAP waivers; (ii) provides requirements for offering GAP waivers, including “contractual liability” obligations, certain disclosures, and cancellation/non-cancellation terms; and (iii) outlines exemptions, such as commercial transactions and GAP waivers sold or issued by federally regulated depository institutions. Additionally, HB 4186 clarifies the procedures a borrower must follow to activate benefits under a GAP waiver. The bill will apply to all GAP waivers in effect on or after July 1.

    On March 28, the Wisconsin governor signed Assembly Bill 663 (AB 663), which amends statutes related to GAP waivers sold in connection with the credit sale or lease of a vehicle. Among other things, AB 663 prohibits creditors from requiring borrowers to purchase GAP waivers and requires creditors to provide written disclosures to borrowers prior to, or at the time of execution, which include that (i) the purchase of a GAP waiver is optional; (iii) outlines the costs and terms; and (iii) specifies procedures borrowers are required to follow to receive GAP waiver benefits. AB 663 also addresses cancellation provisions for borrowers. Furthermore, the bill clarifies that GAP waivers are not insurance and that any cost to a borrower must be separately stated as part of the finance agreement and cannot be considered a finance charge or interest. AB 663 becomes effective September 1.

    Finally, on March 26, the Mississippi governor signed SB 2929, which clarifies that GAP waivers are not insurance and are therefore exempt from Mississippi insurance laws. Provisions promulgated under SB 2929 provide a framework for which GAP waivers may be offered to borrowers in the state and include (i) requirements for contractual liability and other policies to insure a GAP waiver; (ii) disclosure requirements; and (iii) cancellation policies for GAP waivers and procedures for borrowers to obtain a refund in the instance of cancellation or early termination. Similar to Wisconsin AB 663, any cost to a borrower associated with a GAP waiver must be separately stated as part of the finance agreement and cannot be considered a finance charge or interest. The act takes effect July 1.

    State Issues State Legislation GAP Waivers Disclosures Auto Finance

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  • Nebraska enacts legislation amending certain provisions related to the recording of real property interests

    State Issues

    On March 21, the Nebraska governor signed Legislative Bill 750 (LB 750), which amends and clarifies provisions related to the rights and responsibilities of secured creditors and the recording of real property interests. Among other things, LB 750 addresses (i) recording requirements for licensed mortgage bankers and (ii) the liability of a secured creditor that fails to timely record a deed of reconveyance or a release of mortgage when the obligation has been satisfied and a written request to record it has been received from the trustor, mortgagor or grantor. It also provides that “the transfer of any debt secured by a mortgage shall also operate as a transfer of a security of such debt.” The bill takes effect July 18.

    State Issues State Legislation Mortgages Licensing

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  • Multiple states update security freeze legislation

    State Issues

    On March 23, the Governor of Tennessee signed HB 1486, which prohibits credit reporting agencies from charging a fee to a consumer for the placement or removal of a security freeze if the need to place or remove the security freeze was caused by the credit reporting agency. Tennessee already prohibited charging a fee for a security freeze if the consumer is a victim of identity theft and presents a copy of a police report (or other official documentation) to the credit reporting agency at the time of the request. Under Section 47-18-2108 of the Tennessee Code Annotated, the state still allows charging a fee of up to seven dollars and fifty cents for all other placements of a security freeze and up to five dollars to permanently remove a security freeze. HB 1486 is effective immediately.

    On March 20, the Governor of Idaho signed SB 1265, which amends existing law to prohibit credit reporting agencies from charging a fee to a consumer for the first placement of a security freeze and for the first temporary lift of a security freeze during a twelve-month period. The law allows for a fee of up to six dollars for the second placement or temporary lift within a twelve-month period. SB 1265 still allows for a fee of up to $10.00 for the reissuance of a personal identification number or password. The legislation is effective July 1.

    State Issues Security Freeze Credit Reporting Agency Data Breach State Legislation Privacy/Cyber Risk & Data Security

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  • Idaho enacts legislation modifying certain motor vehicle service contract provisions

    State Issues

    On March 19, the Idaho governor signed HB 521, which updates a section of the Idaho Code pertaining to the “Idaho Motor Vehicle Service Contract Act” (the Act) to, among other things, “provide[] for state of Idaho regulation of motor vehicle service contracts.” HB 521 also modifies certain provisions surrounding motor vehicle service contracts by (i) clarifying the definition of a service contract; (ii) providing for service contract reimbursement policy requirements; (iii) setting forth rules associated with the sale of service contracts; (iv) specifying recordkeeping requirements; (v) providing for licensing; (vi) stipulating violation penalties; and (vii) noting that the legislation does not preclude a cause of action under the Idaho Consumer Protection Act. Furthermore, HB 521 notes that the “Idaho Insurance Guaranty Association Act shall not apply to any motor vehicle service contract, mechanical breakdown insurance or motor vehicle service contract liability insurance policy.” The Act is effective July 1.

    State Issues State Legislation Consumer Finance Insurance

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  • Florida prohibits fees for security freezes

    State Issues

    On March 21, the Florida governor signed HB 953, which prohibits credit reporting agencies from charging any fee to consumers or their representatives for “placing, removing, or temporarily lifting” security freezes on a credit report. Previously the state allowed for a fee of up to $10 to use the service. HB 953 still allows a consumer reporting agency to charge a fee of up to $10 for replacing or reissuing a personal identification number or password. The legislation is effective July 1.

    State Issues Security Freeze Credit Reporting Agency Data Breach Privacy/Cyber Risk & Data Security

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  • Florida updates installment loan repayment terms and allowable delinquency charges

    State Issues

    On March 19, the Florida governor signed SB 386, which amends Florida’s consumer finance law to remove the requirement that installment payments must be made monthly, and updates the allowable charges for delinquencies. Specifically, SB 386 now allows equal, periodic installment loan payments to be made every two weeks, semimonthly, or monthly. This provision does not apply to lines of credit. Additionally, SB 386 provides that a delinquency charge for a payment in default may not exceed $15 for payments due monthly; $7.50 for payments due semimonthly; and $7.50 or $5.00 for payments due every two weeks, depending on the number of payments due within a calendar month. The law is effective July 1.

    State Issues State Legislation Consumer Finance Installment Loans

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