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  • Nevada enacts bill limiting civil liability of businesses with respect to Covid-19 transmission claims

    State Issues

    On August 11, the Nevada governor signed SB 4, which, among other things, limits the civil liability of a business with respect to claims related to Covid-19 transmission on premises owned or operated by the business, or during an activity conducted or managed by the business, if the business was in substantial compliance with controlling health standards. The bill also empowers the secretary of state to suspend the state business license of a licensee that fails to comply with controlling health standards related to Covid-19.

    State Issues Covid-19 Nevada Licensing

  • Federal Reserve Board announces revised pricing for its Municipal Liquidity Facility

    Federal Issues

    On August 11, the Federal Reserve Board announced revised pricing for its Municipal Liquidity Facility. The revised pricing reduces the interest rate spread on tax-exempt notes for each credit rating category by 50 basis points and reduces the amount by which the interest rate for taxable notes is adjusted relative to tax-exempt notes. The MLF, originally covered here, was one of several facilities intended to support the flow of credit in the economy.

    Federal Issues Covid-19 Federal Reserve FRB Interest Rate Credit Ratings

  • Court rejects consumer’s RESPA claims against mortgage servicer

    Courts

    On August 5, the U.S. District Court for the Northern District of West Virginia granted a mortgage servicer’s motion for summary judgment, concluding that the servicer “maintained contact and regularly worked” with the consumer to complete her loss mitigation application and thus did not violate Regulation X. According to the opinion, after obtaining the rights to the property and assuming mortgage responsibilities pursuant to a divorce decree, the consumer stopped making mortgage payments in July 2018. The mortgage servicer confirmed the consumer as the successor in interest to the mortgage on March 7, 2019 and on March 14, 2019, the consumer sent the servicer an incomplete loss mitigation application. Between March 2019 and June 2019, the consumer submitted additional loss mitigation application materials and partial application materials for a loan assumption, with the servicer regularly contacting the consumer to obtain documents necessary to complete the applications. The consumer asserted that the servicer, in violation of §1024.41(b)(1), failed to exercise reasonable diligence in obtaining documents and information from her to complete her loss mitigation application and, in violation of §1024.41(c)(1) and §1024.41(c)(2), failed to evaluate her complete loss mitigation application for all loss mitigation options available.

    The court granted summary judgment in favor of the servicer. The court reasoned that “undisputed evidence” establishes that the servicer “maintained contact and regularly worked” with the consumer to obtain the paperwork it needed. Moreover, the court noted that while Regulation X requires a servicer to “evaluate a borrower for all loss mitigation options available, that does not mean it must offer every option it considered—or any option at all.” The court rejected the consumers’ claims that the servicer should have offered a loan modification that did not require information from her ex-husband, concluding that Regulation X “required” her ex-husband’s inclusion and nonetheless, “[u]nder the regulatory framework, [the servicer] has discretion to determine which option(s), if any, it offers an applicant.” Lastly, the court disagreed that the mortgage servicer’s actions caused the consumer to incur “substantial damages,” concluding that “evidence of record is clear that her damages were not caused by or even attributable to [the servicer].”

    Courts RESPA Mortgage Servicing Regulation X Mortgages

  • New York issues language access FAQs for debt collectors

    State Issues

    On August 7, the New York City Department of Consumer Affairs (Department) issued FAQs addressing the language access amendments to the city’s debt collection rules, which became effective on June 27. As previously covered by InfoBytes, the new rules, among other things, require debt collectors to request and retain language preference information from each consumer and prohibit debt collectors from providing false, inaccurate, or incomplete translations to a consumer in the course of collecting a debt. The FAQs note that due to the Covid-19 pandemic, the Department has extended the enforcement grace period to October 1. The FAQs cover, among other things, details regarding the (i) annual report requirements; (ii) the application of the rules to creditors collecting non-default debts; and (iii) statement requirements when debt collectors do not provide any language access services.

    State Issues State Regulators Debt Collection Language Access

  • 4th Circuit: Arbitration agreement applies to acquired company

    Courts

    On August 7, the U.S. Court of Appeals for the Fourth Circuit issued a split opinion vacating a district court’s decision against arbitration in a proposed class action, which accused a satellite TV provider (defendant) of violating the TCPA by allegedly making automated and prerecorded telemarketing calls to an individual even though her number was on the National Do Not Call Registry. The plaintiff filed a lawsuit against the defendant and several other entities and individuals seeking class certification as well as statutory damages and injunctive relief. The defendant moved to compel arbitration, claiming that the plaintiff’s dispute was covered by an arbitration agreement in the contract governing her cell phone service with a telecommunications company, which is an affiliate of the defendant. The district court denied the request, ruling that the allegations “did not fall within the scope of the arbitration agreement.” The plaintiff appealed, “defend[ing] the district court’s scope ruling,” but arguing that no agreement was formed.

    On appeal, the majority concluded that not only did the plaintiff form an agreement to arbitrate with the defendant, the allegations fit within the broad scope of the arbitration agreement. Specifically, the appellate court determined that an arbitration agreement signed by the plaintiff with the telecommunications company in 2012 when she opened a new line of service was extended to potential TCPA allegations against the defendant when the telecommunications company acquired the defendant in 2015. Even though the acquisition happened several years after the plaintiff signed the contract, the majority stated the arbitration agreement had a “forward-looking nature” and that it seemed unlikely that the telecommunications company and its affiliates “intended to restrict the covered entities to those existing at the time the agreement was signed.” According to the majority, “[w]e need not define the outer limits of this arbitration agreement to conclude, based on the arbitration provisions and the contract as a whole, that [the plaintiff’s] TCPA claims about [the defendant’s] advertising calls fall within its scope.” As to the plaintiff’s argument that she only signed the account on behalf of her husband who was the account holder, the majority said the agreement covered “all authorized or unauthorized users,” which the plaintiff was at the time.

    Courts Appellate Fourth Circuit TCPA Arbitration

  • U.S.-UK Financial Innovation Partnership reports on progress

    Federal Issues

    On August 6, the U.S. Treasury Department provided an overview of a recent meeting of the U.S.-UK Financial Innovation Partnership (FIP) where Regulatory and Commercial Pillars participants exchanged views on “deepening U.S.-UK ties in financial innovation.” As previously covered by InfoBytes, the FIP was created in 2019 as a way to expand bilateral financial services collaborative efforts, study emerging fintech innovation trends, and share information and expertise on regulatory practices. Topics discussed included digital payments, cross-border testing of innovative financial services, regulatory and supervisory technology, connections between financial technology firms and financial institutions, and the upcoming 2021 U.S. financial services trade mission to the UK. Participants recognized “the importance of the ongoing partnership in monitoring and analyzing trends in global financial innovation, as well as being an integral component of the U.S.-UK financial services cooperation.”

    Federal Issues Of Interest to Non-US Persons Fintech UK Department of Treasury

  • ARRC releases “SOFR Starter Kit”

    Federal Issues

    On August 7, the Alternative Reference Rates Committee (ARRC) released the “Secured Overnight Financing Rate (SOFR) Starter Kit,” which includes three factsheets that are the result of a series of educational panel discussions held by ARRC in July and August. The various panel discussions were designed to educate on “the history of LIBOR; the development and strengths of SOFR; progress made in the transition away from LIBOR to date; and how to ensure organizations are ready for the end of LIBOR.” Highlights of the three factsheets include (i) background on LIBOR and the selection of SOFR; (ii) key facts on SOFR, including how it works and common misconceptions; and (iii) next steps, including SOFR best practices and recommended fallback language. Additionally, ARRC provided FAQs covering additional background details on the committee and the transition from LIBOR.

    Federal Issues ARRC LIBOR SOFR Of Interest to Non-US Persons

  • Pennsylvania governor announces disbursal of small business grants, opening of second funding round

    State Issues

    On August 10, the Pennsylvania governor announced that $96 million in state grants have been awarded to small businesses impacted by Covid-19 through the Covid-19 Relief Statewide Small Business Assistance fund. The announcement notes that the second and final round of funding has opened and will run through August 28. Eligible applicants that did not receive funding in the first round do not need to reapply and will be considered in the second round. The grants may be used to cover operating expenses during the shutdown and transition to re-opening, including for technical assistance and training related to the stabilization and reopening of businesses.

    State Issues Covid-19 Pennsylvania Small Business Lending Small Business

  • Colorado extends executive order relating to evictions

    State Issues

    On August 10, Colorado issued Executive Order D 2020 162, which extends Executive Order D 2020 101, as amended and extended by Executive Order D 2020 134 (previously covered here). These executive orders limit evictions for certain tenants in order to provide relief from effects of the Covid-19 pandemic. Executive Order D 2020 101 is set to expire on September 9, unless otherwise extended.

    State Issues Covid-19 Colorado Mortgages Evictions

  • President Trump extends student loan forbearance program

    Federal Issues

    On August 8, President Trump issued an executive order to Secretary of Education Betsy DeVos extending a forbearance plan on student loans through the end of the year. The executive order directs the Department of Education to take action to continue to provide “deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.” The current forbearance program provided under the CARES Act (covered by a Buckley Special Alert) ends September 30. While the executive order states that it applies to “student loans held by the Department of Education,” it does not specifically outline which kind of federal student loans are covered under the new forbearance order.

    Federal Issues Covid-19 Student Lending Trump CARES Act

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