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  • Connecticut Law Expands Credit Card Fraud Statutes, Addresses Penalties for Rent Collections on Foreclosed Property

    State Issues

    On June 6, Connecticut Governor Dannel Malloy signed into law Public Act No. 17-26, which expands the statutes on credit card fraud to cover crimes involving debit cards—including payroll and ATM cards—and outlines larceny penalties for collecting rent on foreclosed property. Paper and electronic checks or drafts are excluded from the definition of debit card under revised measure. Additionally, the law specifies changes pertaining to how “notice of a card’s revocation must be sent for purposes of these crimes and expands certain credit card crimes to cover falsely loading payment cards (credit or debit cards) into digital wallets.” Regarding larceny penalties, the law provides that a “previous mortgagor of real property against whom a final judgment of foreclosure has been entered” cannot continue to collect rent after the final judgment if there is no lawful right to do so. Penalties vary from a class C misdemeanor to a class B felony depending on the amount involved. The law takes effect October 1.

    State Issues Credit Cards Debit Cards Prepaid Cards State Legislation Financial Crimes Mortgages Digital Commerce Fraud

  • Texas Bans Credit Card Surcharges

    State Issues

    On May 27, Texas passed legislation that bans surcharges on credit card transactions. Existing Texas law prohibits businesses from increasing the price charged for goods or services for buyers who pay with a debit card or stored value card. With the passage of S.B. 560 , the prohibition on such surcharges will now extend to credit card transactions as well. The law takes effect September 1, 2017. Any person who violates the law can incur a civil penalty of up to $500 for each incident.

    State Issues State Legislation Credit Cards

  • Vermont Governor Enacts Law Including Blockchain Application

    Fintech

    On June 8, Vermont Governor Phil Scott signed into law legislation (S. 135), which would, among other things, allow for broader business and legal application of blockchain technology to promote economic development. Additionally, S. 135 requires the Center for Legal Innovation at Vermont Law School, the Commissioner of Financial Regulation, the Secretary of Commerce and Community Development, and the Vermont Attorney General to prepare a joint report for the General Assembly on “findings and recommendations,” as well as policy proposals and “measurable goals and outcomes” concerning “potential opportunities and risks presented by developments in financial technology.” The new law follows the passage of House Bill 868 last June, which defined blockchain as “a mathematically secured, chronological, and decentralized consensus ledger or database,” and formally recognized blockchain-notarized documents as having legal bearing in a court of law.

    As previously reported in InfoBytes, Arizona recently enacted a similar law (AZ H.B. 2417) recognizing blockchain signatures and smart contracts under state law.

    Fintech Digital Assets Privacy/Cyber Risk & Data Security State Attorney General State Legislation Blockchain Distributed Ledger

  • Alabama Enacts Law Regarding Refund Obligations

    State Issues

    On May 26, Governor Kay Ivey signed into law HB 420, which authorizes and regulates the transactions of guaranteed asset protection (GAP) waivers related to vehicle loans. Importantly, the law requires that if the GAP waiver is cancelled due to early termination of the finance agreement, “the creditor shall provide, or cause the administrator or retail seller to provide, within 60 days of termination, any refund due to a borrower without requiring the borrower to request cancellation of the waiver.” Furthermore, cancellation refunds can be applied toward the amount owed under the finance agreement unless it has proven to be paid in full. The law goes into effect January 1, 2018.

    State Issues State Legislation Auto Finance

  • First State Moratorium on Blockchain Taxes in Nevada

    State Issues

    On June 5, the governor of Nevada signed into law legislation (SB 398) that prohibits local governments from taxing or establishing restrictions on blockchain use—making it the first state to outlaw blockchain taxes. In addition to taxes, the new law prohibits requiring a license, permit, or certificate or any other condition on the use of blockchain. The bill also states that blockchain data can now be submitted in situations where the law requires a record to be in writing.

    State Issues Digital Assets State Legislation Blockchain Fintech Distributed Ledger

  • Colorado Extends Fair Debt Collection Practices Act Through 2028

    State Issues

    On June 1, Colorado Governor John Hickenlooper enacted legislation (SB 17-216) executing recommendations from the Department of Regulatory Agencies’ 2016 Sunset Report, and extending the Colorado Fair Debt Collection Practices Act (Act) an additional 11 years through September 1, 2028. The Act was originally set to be repealed on July 1, 2017. Specifically, the legislation will implement the following points:

    • defines a “debt buyer” as an individual who “engages in the business of purchasing delinquent or defaulted debt for collection purposes,” regardless of whether the debt is collected by the debt buyer, a third-party, or through litigation. The Act applies to debt buyers who purchase consumer debts sold or resold on or after January 1, 2018;
    • states that debt collectors or collection agencies that bring legal actions on debts must follow outlined requirements;
    • defines collection agency expectations for the purchase, sale or attempted collection of a purchased debt;
    • sets the statute of limitations for public actions brought by the administrator of the Act to two years and sets the limit to one year for private actions;
    • requires the administrator to prepare a biannual report to address enforcement actions, complaint processing statistics, and significant legal filings, among other things, in addition to hosting biannual meetings to disseminate the findings.

    SB 17-216 went into effect June 1, 2017 with the exception of certain provisions governing debt buyers, documentation for legal actions, and Uniform Consumer Credit Code Administrator reporting requirements that take effect January 1, 2018.

    State Issues Debt Collection FDCPA State Legislation Debt Buying

  • South Carolina Governor Amends Mortgage Lender, Broker Licensing Requirements

    State Issues

    On May 19, South Carolina Governor Henry McMaster signed into law amendments (S 366) to the state’s Mortgage Lending Act, Mortgage Broker Act, and related laws to revise a variety of mortgage lending definitions, licensing procedures and requirements, and disclosure obligations. The legislation also adds license requirements for mortgage lenders who act as mortgage brokers on the majority of their mortgage loans. The amendments take effect September 16, 2017.

    State Issues Mortgage Lenders Licensing State Legislation

  • Washington State Enacts Law Defining Licensing Requirements for Transmitters of Money and Virtual Currency

    Fintech

    On April 17, Washington Governor Jay Inslee signed into law a new piece of legislation (SSB 5031), which formally adds virtual currency to its money transmitter law. The legislation—introduced at the request of the Washington Department of Financial Institutions (DFI)—amends the definition of money transmission to include virtual currency, which is defined as “a digital representation of value used as a medium of exchange, a unit of account, or a store of value, but does not have legal tender status as recognized by the United States government.” The definition of virtual currency does not, however, include “the software or protocols governing the transfer of the digital representation of value or other uses of virtual distributed ledger systems to verify ownership or authenticity in a digital capacity when the virtual currency is not used as a medium of exchange.” The new law requires that applicants for a money transmitter license with business models that store virtual currency on behalf of others must provide a third-party security audit of all electronic information and data systems acceptable to DFI. Furthermore, licensees transmitting virtual currencies must now hold “like-kind virtual currencies” of the same volume as that held by the licensee but which is obligated to consumers in lieu of permissible investments. Among other disclosures, virtual currency licensees must disclose to consumers a schedule of fees and charges, whether the product or service is insured, that the transfer is irrevocable, and the licensee's liability for mistakes. Among other provisions, the law:

    • outlines new bond requirements for online currency exchange licensees;
    • expands supervisory powers allowing DFI to participate in joint or concurrent examinations with other state or federal agencies;
    • mandates that licensees report all licensee branch locations and all authorized delegates to the nationwide licensing system within 30 days of the contractual agreement with the licensee to provide money services in the state;
    • makes civil penalties $100 per violation per day for each day a violation is outstanding; and
    • excludes from its definition of “money transmission” the “provision solely of connection services to the internet, telecommunications services, or network access; units of value that are issued in affinity or rewards programs that cannot be redeemed for either money or virtual currencies; and units of value that are used solely within online gaming platforms that have no market or application outside of the gaming platforms.”

    The law goes into effect July 23, 2017.

    Fintech Virtual Currency Distributed Ledger State Legislation

  • Arizona Governor Signs Blockchain Records Bill

    Fintech

    On March 29, Arizona Governor Doug Ducey signed H.B. 2417, which recognizes blockchain signatures and smart contracts under state law. H.B. 2417 amends Title 44, Chapter 26, of the Arizona Revised Statutes, and defines “blockchain technology” as “distributed ledger technology . . . protected with cryptography . . . [that] provides an uncensored truth.” The amendment, cleared by the Senate in a 28-1 vote on March 23, addresses signatures and records and states “a signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature.” Furthermore, the amendment also discusses the legality and enforceability of a smart contract, defined by the bill as an “event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger . . . that can take custody over and instruct transfer of assets on that ledger.” Smart contracts, therefore, “may exist in commerce . . . and may not be denied legal effect, validity or enforceability,” thus presenting a new option of delivering information via blockchain.

    Fintech Digital Assets State Issues Blockchain State Legislation Distributed Ledger

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