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Massachusetts Securities Division issues emergency notice easing filing requirements for securities filings
On June 29, the Massachusetts Securities Division issued an emergency notice providing temporary relief from signature and notarization requirements in corporate finance filings, and from certain additional requirements relating to the registration of financial professionals. Specifically, the division will not require manual signatures or notarizations for securities applications and securities notice filings, among others, and will instead accept (i) evidence of electronic signatures or (ii) copies of signed documents. With respect to certain financial professionals, the division has also provided relief relating to (i) physical signatures required on Forms U4, (ii) the submission of Criminal Offender Record Information forms in connection with an application for registration, and (iii) annual update filings and document delivery requirements.
Michigan extends Executive Order regarding remote transactions
On June 24, the Michigan governor announced Executive Order 2020-131, which extends a previous order that temporarily allowed e-signatures on official documents and remote notarizations (previously discussed here). Any notarial act may be performed by a notary that holds a valid notarial commission in Michigan using two-way real-time audiovisual technology if certain conditions are met. The order sets forth additional requirements for remote notarizations and continues through July 31, 2020 at 11:59 p.m.
South Carolina regulator issues interim guidance to businesses regarding payment or performance deferrals and modifications
On June 1, the South Carolina Department of Consumer Affairs issued interim guidance regarding business activities during Covid-19, including payment or performance deferrals and modifications. The department strongly encourages persons and entities engaging in consumer credit transactions or other activities governed by the South Carolina Consumer Protection Code and subject to the department’s oversight to work with borrowers during the Covid-19 crisis and to “be practical, flexible, and empathetic.” The department also encourages businesses to adopt a number of measures related to modifications, workout strategies, waiving late fees, deferment charges, NSF fees, and certain ACH withdrawals, suspending charging off accounts, and suspending repossessions of collateral and foreclosure of real property. The interim guidance also addresses escrow accounts and electronic signatures, and sets forth additional resources for businesses and consumers.
Texas regulator extends reporting deadlines for property tax lenders, urges working with borrowers
On May 13, the Texas Office of Consumer Credit Commissioner revised an advisory bulletin (previously discussed here) for property tax lenders, which sets forth guidance regarding annual report deadlines, electronic signatures, activity from unlicensed locations, and working with borrowers, including by increasing communications, working out modifications, waving late charges, and suspending foreclosures, among other things.
Arkansas Insurance Department issues bulletin to insurers regarding compliance and licensing
On May 11, the Arkansas Insurance Department issued a bulletin regarding compliance and licensing for admitted and surplus lines insurance carriers doing business in Arkansas. Insurers and other regulated entities are advised that they must continue to expeditiously adjust claims during Covid-19. The bulletin also provides guidance on regulatory filing deadlines, the permissibility of electronic filings and signatures, the status of on-site examinations by the department, license renewals, and continuing education deadlines.
District of Columbia Department of Insurance, Securities and Banking issues bulletin to certain insurance companies
On April 23, the District of Columbia Department of Insurance, Securities and Banking issued a bulletin to insurers, captives, and risk retention groups regarding modified regulatory filing requirements during the public health emergency. While companies are still required to make all required electronic filings with the NAIC based on modified filing deadlines, if applicable, the department will allow insurers an additional 30 to 60 days, depending on the filing, to complete filings upon a request to the department on or before the normal deadline. The bulletin sets forth the filings eligible for 30- or 60-day extensions. The bulletin also provides guidance regarding electronic filings and signatures. Further, while the department will not conduct any on-site examination work during the stay-at-home order, the department may still request certain electronic records to track trends arising from the Covid-19 pandemic.
Texas Office of Consumer Credit issues revised emergency bulletin for lenders
On April 16, the Texas Office of Consumer Credit issued a revised bulletin outlining emergency guidance for regulated lenders navigating the Covid-19 crisis. The guidelines: 1) extended due date for filing annual reports from May 1 to June 1; 2) encouraged lenders to work with consumers, including by working out modifications to assist with payments, waiving fees and charges, suspending charged-off accounts, and suspending repossessions of collateral or foreclosure of real property, among other things; 3) reminded lenders of legal requirements for using electronic signatures; and 4) permitted lenders to conduct regulated lending activity from unlicensed locations, subject to certain conditions.
California Department of Real Estate updates FAQs for licensing processes
On April 15, the California Department of Real Estate updated its FAQs for licensing processes. The FAQs answer questions relating, among other things, to the closure of DRE offices, the cancellation and rescheduling of licensing exams, renewal of real estate license, and electronic signatures on licensing documents.
Michigan governor issues temporary order enabling remote notarization
On April 8, Michigan Governor Gretchen Whitmer issued an executive order enabling remote notarization in response to the Covid-19 crisis. Whitmer’s order allows for the use of electronic signatures, remote notarization, remote witnesses and attestations, and remote visitations in necessary transactions and interactions. The order took effect immediately and will be in place through May 6.
CFPB proposes debt collection rules
On May 7, the CFPB issued its Notice of Proposed Rulemaking (NPRM) amending Regulation F, to implement the Fair Debt Collection Practices Act (FDCPA) (the “Proposed Rule”). The Bureau also released a Fact Sheet on the Proposed Rule. The proposed effective date is one year after the final rule is published in the Federal Register, with comments on the Proposed Rule due 90 days after publication. Generally, the Proposed Rule covers debt collection communications and disclosures and addresses related practices by debt collectors. Highlights of the Proposed Rule include:
- Coverage. The Proposed Rule incorporates many existing provisions of the FDCPA into Regulation F including existing definitions of “debt collector” and “debt,” with only minor wording and organizational changes. The Proposed Rule would generally only cover third-party debt collectors, not the first-party efforts of the original creditor or its servicer, and specifically excludes in-house collectors of creditors (“[a]ny officer or employee of a creditor while the officer or employee is collecting debts for the creditor in the creditor’s name.”). The Proposed Rule restates the FDCPA’s definition of “consumer” but interprets the term to include “a deceased natural person who is obligated or allegedly obligated to pay a debt.” Additionally, with respect to the special definition of “consumer” for the section on communications in connection with debt collection, the Proposed Rule interprets that to include a confirmed successor in interest as well as the personal representative of a deceased consumer’s estate.
- Disclosures.
- Validation Notice. The Proposed Rule requires a debt collector to provide a consumer with a validation notice that includes certain information about the debt and the consumer’s rights with respect to the debt including: (i) the debt collector’s name and mailing address; (ii) the name of the creditor to whom the debt is currently owed and, for consumer financial product or service debt as defined in the Proposed Rule, the name of the creditor to whom the debt was owed on the itemization date; (iii) the itemization date and the amount of debt owed on that date; (iv) itemization of the current amount of the debt in a tabular format reflecting interest, fees, payments, and credits since the itemization date; (v) the current amount of the debt; (vi) if the debt is a credit card debt, the merchant brand, if any, associated with the debt, to the extent available to the debt collector; (vii) information about consumer protections; and (viii) consumer response information, including dispute prompts. The validation notice must also include the “debt collector communication disclosure” indicating the communication is for the purposes of collecting a debt.
- Disclosure Safe Harbor. Under the Proposed Rule, if a debt collector delivers in writing the Bureau’s Model Form B-3 validation notice, provided in appendix B to the Proposed Rule (available on pg. 491), it is considered to be in compliance with the validation notice requirements, though use of the model form is not required.
- Electronic Disclosures. The Proposed Rule would require debt collectors who provide required disclosures electronically to obtain the consumer’s affirmative consent directly to comply with Section 101(c) of the Electronic Signatures in Global and National Commerce Act (E-SIGN Act). In the alternative, debt collectors can send the electronic disclosures to a particular email address or phone number (in the case of text messages), that the creditor or prior debt collector could have with regard to that debt in accordance with the E-SIGN Act. Additionally, the Bureau released a flow chart to clarify how a debt collector would provide certain required disclosures electronically.
- Conduct Provisions.
- Time and Place Restrictions. The Proposed Rule clarifies that calls to mobile telephones and electronic communications, such as emails and text messages, are subject to the FDCPA’s prohibition on communicating at times or places that the debt collector knows or should know are inconvenient to the consumer, subject to certain exceptions.
- Restriction on Number of Telephone Calls. With exceptions for certain types of calls (such as those responding to a consumer request for information or made with prior consent by the consumer given directly to the debt collector), the Proposed Rule prohibits a debt collector from calling a consumer about a particular debt more than seven times within a seven-day-period. The Proposed Rule also prohibits a debt collector from calling a consumer for seven consecutive days after having had a telephone conversation with the consumer regarding the debt, beginning with the date of the conversation. A debt collector who does not exceed the frequency limits is deemed in compliance with the FDCPA’s prohibition on harassment and the Dodd-Frank Act’s prohibition on unfair acts or practices as it relates to telephone calls.
- Text and Email Communications. The Proposed Rule does not contain a restriction on the frequency or number of communications a debt collector can make via email or text message. However, the Proposed Rule requires a debt collector to include—in emails, text messages and other electronic communications—an option for the consumer to unsubscribe from future such communications and would prohibit a debt collector from attempting to communication through a medium the consumer has requested the collector not use, including a particular phone number or email address. The Proposed Rule would prohibit a debt collector from contacting a consumer through a workplace email address (absent prior consent by the consumer or receipt by the debt collector of an email sent from the consumer’s work email account) or through a public-facing social media platform, except through the platform’s private message function.
- Limited-Content Messages. The Proposed Rule specifies certain content parameters for a “Limited-Content Message” that a debt collector could send by voicemail or text that would not be considered a “communication” and therefore, would not need to include the required disclosures. Additionally, if the limited-content message was heard or observed by a third party, it would not constitute a prohibited third-party disclosure.
- Other prohibitions. The Proposed Rule prohibits a debt collector from, among other things, (i) suing or threatening to sue on a time-barred debt; (ii) reporting debts to credit reporting agencies prior to initiating communications with the consumer; and (iii) selling, transferring or placing for collection a debt to another debt collector that the collector knows or should know has been paid or settled, discharged in bankruptcy, or relates to a filed identity theft report.