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  • Washington state issues Phase 2 guidance for real estate industry

    State Issues

    On May 19, Washington issued guidelines for the real estate industry during Phase 2 of the state’s reopening plan. Among other things, the guidelines prohibit in-person meetings with customers except when necessary to view a property or sign documents and limit attendance at on-site activities—such as such as appraisals, viewings, or walkthroughs — to three people.

    State Issues Covid-19 Washington Real Estate Consumer Finance Appraisal Mortgages

  • FINRA updates Covid-19 supervisory FAQs to extend regulatory deadlines

    Federal Issues

    On May 19, FINRA updated its Covid-19 FAQs (previously discussed here, here, here, here, and here) to extend certain reporting, certification, and testing requirements until June 30, 2020. First, FINRA extended the deadline for registered persons temporarily functioning as principals under FINRA Rule 1210.04 to pass qualification examinations. Second, FINRA extended the deadline for reports related to a member’s supervisory control system that are required under FINRA Rule 3120. Finally, FINRA extended the deadline for members to execute certifications required under FINRA Rule 3130.

    Federal Issues Covid-19 FINRA Supervision

  • Pennsylvania authorizes real estate businesses to commence in-person operations

    State Issues

    On May 19, the Pennsylvania governor issued a revised executive order permitting all businesses in the real estate industry to commence in-person operations, and the Department of Health made corresponding revisions to previous orders to implement the change. Concurrently, the Pennsylvania Department of State issued guidance to the real estate industry, which contains requirements for conducting in-person operations in a manner that protects the health of customers and employees.

    State Issues Covid-19 Pennsylvania Real Estate Mortgages

  • Texas regulator urges motor vehicle sales finance licensees to work with borrowers

    State Issues

    The Texas Office of the Consumer Credit Commissioner revised an advisory bulletin urging motor vehicle sales finance licenses to work with consumers during the Covid-19 crisis (previously covered here). Among other measures, the regulator urged licensees to increase consumer communication, work out modifications, waive certain charges, and suspend repossessions.

    State Issues Covid-19 Texas Auto Finance Licensing

  • VA provides additional lender guidance concerning Covid-19

    Federal Issues

    On May 19, the Department of Veterans Affairs (VA) issued Circular 26-20-19 to remind lenders of certain VA policies and provide guidance regarding the processing of VA-guaranteed loans during Covid-19. The circular provides guidance regarding IRS Form 4506-T, renewal applications, applications for underwriter approvals, and fees to conduct business with the VA. The circular is rescinded on April 1, 2021.

    Federal Issues Covid-19 Department of Veterans Affairs Underwriting Military Lending

  • CFPB further extends comment period for proposed rulemaking on time-barred debt disclosures

    Agency Rule-Making & Guidance

    On May 19, the CFPB announced a further extension to the comment period on its Supplemental Notice of Proposed Rulemaking (NPRM) related to time-barred debt disclosures (covered by a Buckley Special Alert). The NPRM, issued in February, would amend Regulation F, which implements the FDCPA, to require debt collectors to make certain disclosures when collecting time-barred debts. Due to challenges created by the Covid-19 pandemic, the June 5 deadline has been extended until August 4.

    Agency Rule-Making & Guidance CFPB Debt Collection FDCPA Covid-19

  • 34 state AGs urge inclusion of cannabis banking legislation in Covid-19 relief

    State Issues

    On May 19, a group of 34 state attorneys general wrote to congressional leaders urging the inclusion of the SAFE Banking Act in any future Covid-19 relief package. As previously covered by InfoBytes, the SAFE Banking Act was passed by the House in September 2019 and would provide a safe harbor for depository institutions that provide a financial product or service to a covered business in a state that has implemented laws and regulations that ensure accountability in the marijuana industry. In the letter, the attorneys general outline three reasons legislative action for cannabis banking is needed based on the Covid-19 pandemic: (i) cash-intensive business models could be a target of increased criminal activity; (ii) large cash transactions place the public and government officials at heightened risk of virus exposure; and (iii) tax revenue from over $15 billion in sales in 2019 could provide critical relief for state and local governments. The letter reminds congressional leaders that support for the SAFE Banking Act, or similar legislation, “is not a call for the legalization of medical or retail marijuana in [] jurisdictions that choose not to pursue such an approach,” instead it would be a reflection that “our federalist system of government that is flexible enough to accommodate divergent state approaches.”

    State Issues State Attorney General Covid-19 Federal Issues Federal Legislation Cannabis Banking SAFE Act

  • Treasury and Fed testify on CARES Act relief

    Federal Issues

    On May 19, the Senate Committee on Banking, Housing, and Urban Affairs conducted a hearing with Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven T. Mnuchin to discuss the agencies’ efforts to implement the CARES Act relief provisions to support consumers and help stabilize the infrastructure of the economic system. Topics discussed included emergency lending facilities, such as the Main Street Lending Program and the Municipal Liquidity Facility, as well as the Paycheck Protection Program (PPP) and the Payroll Support Program.

    Mnuchin testified that Treasury has “worked closely with the Small Business Administration on the [PPP] to ensure the processing of more than 4.2 million loans for over $530 billion[.]” He issued praise for the nearly 400 Community Development Financial Institutions and Minority Depository Institutions, as well as the many small and non-bank lenders that are participating in the program. Mnuchin noted that, while Treasury has already committed up to $195 billion of the $500 billion provided by Congress, the agency plans to use the remainder to create or expand programs as necessary after determining how best to deploy the money to help losses associated with the Covid-19 pandemic. “The only reason I have not allocated it fully is we are just starting to get these facilities up and running,” Mnuchin emphasized during the hearing. “We want to have a better idea as to which one of the facilities needs more capital as well as the potential for adding additional facilities.” Mnuchin also stated that Treasury is “fully prepared to take losses in certain scenarios on that capital.”

    Powell discussed lending programs and monetary policy efforts taken by the Fed under section 13(3) of the Federal Reserve Act since the pandemic started, including measures to help stabilize short-term funding markets. These include lengthening the term and lowering the rate on discount window loans to depository institutions, and—together with Treasury—establishing the Commercial Paper Funding Facility and the Money Market Mutual Fund Liquidity Facility. Powell also discussed the Term Asset-Backed Securities Loan Facility, which will lend against asset-backed securities “backed by newly issued auto loans, credit card loans, and other consumer and small business loans.” Powell stressed that “public input has been crucial” in the agency’s development of these facilities and that additional adjustments may occur “as we learn more” about the needs of potential borrowers.

    Federal Issues Department of Treasury Federal Reserve Senate Banking Committee Covid-19 CARES Act

  • Fannie and Freddie: Borrowers eligible for refinance or purchase while in forbearance

    Federal Issues

    On May 19, the FHFA announced that Fannie Mae and Freddie Mac issued temporary guidance that would allow borrowers who are in forbearance, or have recently ended forbearance, to be eligible to refinance or purchase a new home. According to Fannie Mae Lender Letter LL-2020-03 and Freddie Mac Bulletin 2020-17, borrowers are eligible to purchase a new home or refinance their mortgage if they are current on their mortgage—defined as having “made all mortgage payments due in the month prior to the note date of the new loan transaction by no later than the last business day of that month”—or if the mortgage is currently in a loss mitigation solution (the borrower must have made at least three timely payments as of the note date of the new transaction). Lenders are required to apply the guidance to loans with application dates on or after June 2, but may apply them immediately.

    On the same day, Fannie Mae also issued an update to LL-2020-06, which extends the effective date for eligible loans in forbearance due to a Covid-19 hardship to June 30 with delivery to Fannie Mae by August 31.

    Federal Issues Covid-19 Fannie Mae Freddie Mac Forbearance Loss Mitigation Refinance Mortgages

  • Financial institutions, CRA reach settlement over 2017 data breach

    Courts

    On May 15, a putative class of financial institutions filed an unopposed motion for preliminary approval of a settlement in a multidistrict litigation stemming from a credit reporting agency’s (CRA) 2017 data breach. The class, comprised of financial institutions that issued credit or debit cards whose information was believed to have been breached, argued that the data breach was the result of the CRA’s alleged failure to implement the necessary precautions to safeguard consumers’ personally identifiable information (PII). The class further contended that financial institutions suffer the primary harm caused by identity theft, because they “bear the risk of loss when identity thieves use a customer’s PII to open accounts, transfer funds, take out loans, make fraudulent transactions, or obtain credit or debit cards in the customer’s name.”

    The proposed settlement—pending approval from the U.S. District Court for the Northern District of Georgia—will require the CRA to pay $5.5 million to class members that submit valid claims, spend at least $25 million over a two-year period on “data security measures pertinent to the [financial intuitions] and their claims,” and cover settlement administration and notice costs, as well as agreed-upon attorney fees, expenses, and named-plaintiff service awards. The motion for preliminary approval states that the CRA will also, among other things, (i) adopt and/or maintain certain measures in order to identify “reasonably foreseeable threats” to PII; (ii) respond to identified vulnerabilities that may impact the confidentiality of PII; (iii) design safeguards to manage risks identified though data security risk assessments; (iv) implement a security control framework consistent with requirements for systems that “store, process, or transmit [p]ayment [c]ard [d]ata in connection with U.S. payment card transactions”; and (v) maintain a compliance program and submit annual certifications to class counsel.

    Courts Settlement Privacy/Cyber Risk & Data Security MDL Data Breach Credit Reporting Agency

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