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OCC: National banks do not need state money transmitter licenses to exercise fiduciary powers
In June, the OCC posted an interpretive letter to establish that a national bank, subject to certain limits established by 12 U.S.C. § 92a and 12 C.F.R. part 9, may exercise fiduciary powers in any state without obtaining a state money transmitter license. Interpretive Letter #1167 responds to a request for clarification as to whether a bank, whose fiduciary powers are derived from and governed by the National Bank Act and OCC regulations, is required to obtain a state money transmitter license or exemption in order to exercise its fiduciary capacity. The OCC determined that under 12 U.S.C. § 92a, national banks are authorized to act in specific fiduciary capacities “and any other fiduciary capacity permitted for state institutions when acting in the capacity is not in contravention of state law.” The OCC noted that while a national bank’s fiduciary capacities are determined by reference to state law, 12 U.S.C. § 92a (i) “imposes no geographic limits on where a national bank with fiduciary powers may act in a fiduciary capacity”; and (ii) “does not limit where a national bank may market its fiduciary activities, where its fiduciary customers may be located, or where the property being administered may be located.” As such, a national bank may conduct federally authorized fiduciary activities in any state, even if aspects of the bank’s activities fall within a state’s definition of money transmission and the bank is not licensed as a money transmitter in that state. According to the OCC, state laws that are intended to impose licensing requirements on a national bank’s exercise of fiduciary powers are preempted and satisfaction of an exemption from those requirements is not required. However, the OCC cautioned that “[d]ifferent facts and circumstances or consideration of different laws and regulations could result in a different conclusion.”
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.
New Jersey Department of Banking extends filing deadlines for certain annual reports
On May 12, the New Jersey Department of Banking Insurance issued a bulletin regarding the extension of deadlines for certain entities and individual regulated by the Division of Banking to file annual reports. Certain enumerated licensees, including check cashers, insurance premium finance companies, motor vehicle installment sellers, and money transmitters, are granted an extension until June 1 to file annual reports. However, licensees must file their subsequent annual report by April 1, 2021. Mortgage lenders and mortgage brokers who are required to file an annual report on or before May 1, are also granted an extension to June 1. The next annual report must be filed by May 1, 2021.
Florida regulator reminds money transmitters of license renewal extensions
On May 4, the Florida Office of Financial Regulation reminded Money Transmitter Part II licensees that the deadline to renew licenses has been extended to June 1, 2020 (previously covered here). Licensees that fail to renew by June 1 will be considered inactive and will need to pay an additional fee to reactivate the license. Inactive licenses not renewed by July 30, 2020 will expire.
Delaware check seller and money transmitter license required to transition to NMLS by June 15
On April 15, NMLS published a Delaware Check Seller and Money Transmitter License requirements checklist for a new application, amendment, surrender, and license transition to NMLS. Per Delaware’s recent mandate, as detailed in APPROVED’s post from April 7, new license applicants and existing licensees will be required to use NMLS beginning April 15, 2020. All existing licensees have until June 15, 2020 to submit their license transition requests through NMLS.
Please see the full requirements for transitioning the license to NMLS here.
New Mexico Director of Financial Institutions Division calls on MSBs to cease standalone operations
On April 9, New Mexico Director of Financial Institutions Division Christopher Moya issued an order calling on all standalone money services businesses (MSB) to temporarily close and suspend operations. MSBs are not designated as essential businesses in New Mexico, and as such, were instructed to cease all standalone storefront operations to further combat the spread of Covid-19. Branches located physically within a business deemed essential were permitted to stay in operation, as well as MSBs with telephonic or online services.
Delaware directs check sales and money transmitter licensees to use NMLS
The Delaware Office of the State Bank Commissioner issued a directive that, beginning on April 15, all Chapter 23, Sale of Checks and Transmission of Money Licensees are advised to use the Nationwide Mortgage Licensing System for applications, renewals, surrenders and amendments.
Delaware directs check sales and money transmitter licensees to use NMLS
The Delaware Office of the State Bank Commissioner issued a directive that, beginning on April 15, all Chapter 23, Sale of Checks and Transmission of Money Licensees are advised to use the Nationwide Mortgage Licensing System for applications, renewals, surrenders and amendments.
Hawaii regulator permits licensees to reduce office hours, temporarily close
The Hawaii Division of Financial Institutions issued guidance indicating that it will temporarily permit licensees with locations in Hawaii to reduce hours or close offices during Hawaii’s Covid-19 Emergency Period. The guidance clarifies that financial institutions and escrow depositories are required to provide notice of closures or reductions in hours to the Division and to customers as soon as practicable. While mortgage loan originators, mortgage servicers, and money transmitters are not required to provide notice, the Division requests a courtesy notification of any closure or reduction in hours, and mortgage loan originator branch managers must post signage at the branch office.
Arkansas Securities Department provides relief from regulatory deadlines and guidance on notarization
On April 1, the Arkansas Securities Department issued guidance providing relief from certain regulatory deadlines to licensed money services businesses and mortgage companies. The department is providing a 60-day extension to file financial statements and a 30-day extension to submit Call Reports and the MCR Standard Financial Condition Reports. Further, the guidance provides that licensed entities are authorized to use real-time audio and visual means to witness the signing of a legal document so long as the identity and physical presence of any and all witnesses and signers in Arkansas are validated at the time of execution of the document by real-time audio or visual means.