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Washington State enshrines new act on uniform special deposits
On March 13, the Governor of Washington State signed into law SB 5801, enshrining a new chapter titled the Uniform Special Deposits Act. The law will apply to special deposits under account agreements that intend to establish a special deposit. In Section 5, a “special deposit” is characterized as a bank deposit for the benefit of two or more beneficiaries, denominated in a currency for the purposes stated in the account agreement, and “subject to a contingency.” The law further described the process for determining a permissible purpose, payment to a beneficiary by a bank, and the duties and liability of the bank, among others. It also described that, unless provided for in the account agreement, special deposits will terminate five years after the date it was first funded. The Uniform Special Deposits Act will go into effect July 1.
New Hampshire enshrines a new consumer privacy law
On March 6, the Governor of New Hampshire, Chris Sununu, signed into law a sweeping consumer privacy bill. Under the act, consumers will have the right to confirm if a controller (an individual who controls personal data) is processing their personal data, a right to access that data, as well as correct inaccuracies, obtain a copy, delete, and opt-out of the processing of the data for targeted advertising purposes. The act also imposed limits on collectors, including that a controller shall (i) limit the collection of data to only what is adequate, relevant, and reasonably necessary for the intended purpose; (ii) establish and maintain administrative security practices to protect the confidentiality of consumer personal data; (iii) not process sensitive data without obtaining the consumer’s consent or, if the data concerns a known child, process the data in accordance with COPPA; (iv) provide an easy means for consumers to revoke consent; and (v) not process personal data for targeted advertising purposes without consumer consent. The bill further outlined a processor’s responsibilities and required controllers to conduct a data protection assessment for each action that may present a risk of harm to a consumer. The act will go into effect on January 1, 2025.
Wyoming amends its open banking provisions
On March 8, the Wyoming governor signed HB 145 (the “Act”) related to open banking, making two changes. First, the amendment updated the definition of a “customer” as a natural person or an agent, trustee, or representative acting on behalf of a natural person. Second, and for banks already participating in open banking, the Act limited the release of consumer data to third-party financial service providers to data that is only necessary for the consumer to receive the third-party product or service. The Act will go into effect on July 1.
New York State bill requires disclosure of beneficial owners of limited liability companies
On March 1, a newly enacted bill from New York State, S8059, (the “Act”) was signed by the governor and amended New York State law governing limited liability companies by mandating New York LLCs to file beneficial ownership information with the New York Department of State. The Act set a deadline for new LLCs to file the required ownership information within 30 days of their establishment; for existing LLCs, the bill required them to comply with the new requirements by January 1, 2026. The Act demanded that exempt companies, defined as LLCs or foreign LLCs not otherwise defined as a reporting company that met a condition for exemption in 31 U.S.C. §5336(a)(11)(B), electronically declared their statuses and the basis for their exemptions shortly after formation. It further imposed an annual requirement on all limited liability companies to update or confirm their ownership or exempt status. Additionally, access to the beneficial ownership reports was restricted to law enforcement under certain conditions. The Act enforced compliance with the requirements by imposing up to $500 daily fines for late submissions, the possibility of companies being marked as delinquent, and the threat of dissolution for persistent non-compliance.
New York AB 2672 goes into effect and establishes credit card surcharge provisions
Recently, New York AB 2672 (the "Act") was enacted, and went into effect on February 11. The Act requires merchants that impose a credit surcharge fee to clearly and conspicuously post prices inclusive of a surcharge fee. The Act allows merchants to use a two-tier pricing system, in which two different prices display whether a consumer uses a credit card or another form of payment on a transaction. The Act also establishes a civil penalty not to exceed $500 for each violation.
New York State enhances the consumer notification obligations on automatic renewals
Recently, the State of New York enacted SB 5941-B (the “Act”), which revises the general business law, focusing on the obligation of businesses to inform consumers about an impending automatic renewal or continuous service charge at least forty-five days before the charge is applied. The amendment states that in the case of a business allowing a consumer to accept an automatic renewal of six months or more, the business is required to notify the consumer about the upcoming automatic renewal or continuous service charge at least fifteen days, but not more than forty-five days, before the cancellation deadline for such automatic renewal. The notice must also include instructions on how the consumer can cancel the renewal charge. The new amendment does not apply to any business, or its subsidiary or affiliate, subject to regulation by the NY Department of Public Service or the FCC. The bill became effective upon enactment.
California’s new mortgage servicer during a “state of emergency” to be effective
Recently, California enacted SB 455 to address mortgage servicing during a state of emergency. SB 455 will require a mortgage servicer (transferring a mortgage secured by a property within a proclaimed emergency zone) to provide the new servicer with written records between the borrower and the old servicer on the borrower’s election to use insurance proceeds to repair or replace property damaged by a disaster. Additionally, SB 455 prevents the new servicer from disregarding any prior written agreements between the original servicer and the borrower regarding property repairs that were approved by the owner of the promissory note. The SB 455 bill will be effective January 1, 2024.
NY enacts the Fair Medical Debt Reporting Act
On December 13, the New York governor signed into law S4907A, or the Fair Medical Debt Reporting Act (the “Act”), a medical debt credit reporting bill that will bar credit reporting agencies from directly or indirectly incorporating medical debt into consumer credit reports. The Act specifically prohibits hospitals, health care professionals, and ambulances from reporting medical debt to credit agencies. The Act defines medical debt as any amount owed or claimed by a consumer “related to the receipt of health care services, products, or devices provided to a person” by a hospital, health care professional, or ambulance service. Notably, obligations charged to a credit card are excluded from medical debts unless the card is specifically designated for health care expenses under an open-ended or closed-end plan.
NY passes law to preserve credit card points and rewards for consumers
On December 10, New York General Business Law § 520-e went into effect according to the Governor’s press release. The new law prevents credit card holders from losing unused earned credit card points and requires credit card issuers to send consumers a notice of any outstanding credit card points or rewards they have accrued in their accounts, even after the account is closed. Specifically, credit card issuers will have 45 days to provide notice of any outstanding credit card rewards or points following the closing of a consumer’s account. From the date of the issuer’s notice, consumers will have a 90-day grace period to redeem their points or rewards.
DFPI opens comment period for the Digital Financial Assets Law
On November 20, DFPI announced it is seeking public comment before it begins its formal rulemaking process on its Digital Financial Assets Law (DFAL), which was enacted on October 13. As previously covered by InfoBytes, DFAL created a licensing requirement for businesses engaging in digital financial asset business activity and is effective on July 1, 2025.
For comments that recommend rules, DFPI encourages comments that “propose specific rule language and provide an estimate, with justification, of the potential economic impact on business and individuals that would be affected by the language.” Additionally, DFPI requests metrics, applicable information about economic impacts, or quantitative analysis to support comments. Among other topics, DFPI especially asks for comments related to (i) application fees and potential fee adjustments based on application complexity; (ii) surety bond or trust account factors; (iii) if capital minimums should vary by the type of activity requiring licensure; and (iv) its stablecoin approval process.
Comments must be received by January 12, 2024. On January 8, 2024, DFPI will host a Virtual Informal Listening Session with stakeholders to discuss feedback on this informal invitation for comments.