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Fintechs can now apply to be lenders under the PPP
The Small Business Administration (SBA) and the Treasury Department released a lender agreement for non-bank and non-insured depository institution lenders seeking to make SBA-guaranteed financing under the Paycheck Protection Program (PPP) as part of the CARES Act. The agreement sets forth attestation requirements for two subsets of eligible lenders. Group A attestation requirements relate to depository or non-depository financing providers who have, among other things, “originated, maintained, and serviced more than $50 million in business loans or other commercial financial receivables during a consecutive 12 month period in the past 36 months.” Group B attestation requirements relate to service providers of insured depository institutions, who among other things: (i) must have a contract to support an insured depository institution’s lending activities; and (ii) within the past three years, must have been subject to an examination by the Federal Reserve, OCC, or FDIC in connection with that role. Unless an earlier termination occurs, lenders under the agreement will have “authority to make covered loans” until July 1, 2020.
As previously covered by InfoBytes, the SBA, in consultation with the Treasury Department, recently updated PPP frequently asked questions to provide additional clarifications to lenders and borrowers.
Please see Buckley’s dedicated SBA page, which includes additional SBA resources.
Kentucky Department of Financial Institutions provide guidance to non-depository institutions
On March 24, The Kentucky Department of Financial Institutions (DFI) provided guidance to non-depository institutions to take steps to comply with CDC directives and Governor Andy Beshear’s guidance and executive orders. Entities are ordered to reduce face-to-face transactions; work with customers affected by the coronavirus to meet their financial needs; implement policies and procedures to work constructively with customers (including by restructuring existing loans, extending repayment terms, and waiving fees); manage COVID-19 related staffing issues; and ensure that business continuity plans include pandemic planning.
Louisiana Commissioner of Financial Institutions advises non-depository institutions on temporary closures
On March 18, Louisiana’s Commissioner of Financial Institutions released emergency advisories for non-depository institutions, specifically repossession agents and bond for deed escrow agents, check cashers, pawnbrokers, licensed consumer lenders/brokers, and residential mortgage lenders. The advisories authorized the temporary closure or relocations of licensed locations and waived the standard 30-day notice requirement for such closures. Licensees should notify the Office of Financial Institutions as soon as possible regarding any temporary closures or relocations and may submit requests for waiver of the standard change of location fee by email. Unless otherwise instructed, temporary location changes should not be submitted through NMLS. In addition, the advisory for residential mortgage lenders confirms that licensed MLOs may work from their homes.
New Hampshire amends licensing requirements for nondepository mortgage bankers, pawnbrokers
On May 15, the New Hampshire governor signed HB 649 to, among other things, amend the state licensing requirements for nondepository mortgage bankers, brokers, and servicers, as well as pawnbrokers and moneylenders. Specifically, licensing applicants must file with the banking commissioner a written verified application through the Nationwide Multistate Licensing System and Registry (NMLS) using the NMLS form, or by providing all the same information required on the application using the NMLS. Applicants must also file a statement of net worth. Finally, HB 649 defines what constitutes a “significant event” pertaining to a licensee’s practices with respect to consumer credit, small loans, debt adjustments, and money lending. The act became effective immediately.
Buckley Sandler Special Alert: OCC announces it will accept fintech charter applications, following the release of Treasury report on nonbank financial institutions
On July 31, the OCC announced that nondepository financial technology firms engaged in one or more core banking functions may apply for a special purpose national bank (SPNB) charter. The announcement follows a report released the same day by the Treasury Department, which discusses a number of recommendations for creating a streamlined environment for regulating financial technology, and includes an endorsement of the OCC’s SPNB charter for fintech firms (fintech charter).
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Click here to read the full special alert.If you have questions about the report or other related issues, please visit our Fintech practice page, or contact a Buckley Sandler attorney with whom you have worked in the past.
NYDFS enters next phase in use of nationwide licensing system
On April 25, the New York Department of Financial Services (NYDFS) announced the next phase in its initiative to manage the licensing and regulation of all nondepository financial institutions operating in the state. Beginning May 1, budget planners and premium finance companies will be able to transition their licenses to the Nationwide Multistate Licensing System and Registry (NMLS). Companies applying for new licenses will be also able to submit applications through the NMLS. As previously covered in InfoBytes, licensed lenders, sales finance companies, and money transmitters made the transition to NMLS last year. “The Department is proud to continue our work with [the Conference of State Bank Supervisors] and our fellow state regulators in the ongoing modernization of financial services regulation, enhancing the strong regulatory framework created by states, and supporting industry innovation,” stated NYDFS Superintendent Maria T. Vullo.