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Oregon governor exempts CARES Act payments from garnishment
On April 17, the governor of Oregon issued an executive order exempting all CARES Act stimulus payments to individuals from garnishment, subject to limited exceptions. CARES Act payments will remain exempt from garnishment when deposited into a financial institution. The exemption will remain in effect until terminated by the governor.
Florida expands motor vehicle retail installment initial payment rule
On April 17, the commissioner of the Florida Office of Financial Regulation issued Emergency Order 2020-03, which temporarily expands the motor vehicle retail installment initial pay rule. The order permits a motor vehicle retail installment seller licensed under Chapter 520 of the Florida Statues to allow the first payment of a motor vehicle retail installment contract to be scheduled up to 90 days from the date of the loan.
Alaska Department of Commerce issues special notice regarding premium finance company contracts
The Alaska Department of Commerce, Division of Banking and Securities (Division), issued a special notice responding to inquiries about premium finance companies’ contracts with a power of attorney to cancel all policies upon default. The division notes that while it does not have the authority over the contract or legal agreement, it encourages premium finance companies to review applicable guidance and recent bills passed by federal and state governments related to the Covid-19 crisis pertaining to late payments.
NCUA announces Covid-19 relief measures for credit unions
On April 17, the NCUA released a letter to federally insured credit unions to address temporary relief available as a result of Covid-19. The letter covers a number of matters discussed at the NCUA board’s open meeting held on April 16, including an interim final rule (IFR) issued on April 13 (covered by InfoBytes here) that permits credit unions to access the NCUA’s Central Liquidity Facility with no waiting period for advances. The letter also provides details on two real estate appraisal rules approved by the Board to provide regulatory relief for credit unions: (i) an IFR “that temporarily defers real estate-related appraisals and evaluations” for up to 120 days; and (ii) a final rule that increases the threshold amount for which a transaction involving real estate requires an appraisal from $250,000 to $400,000. Both the IFR and the final rule take effect upon publication in the Federal Register and expire on December 31. In addition, the board approved a final rule which (i) increases the maximum aggregate amount of loans a credit union can purchase from one lender without a waiver to “the greater of $5 million or 200 percent of a federally insured credit union’s net worth”; (ii) temporarily suspends the limit “on the eligible obligations that a federal credit union may purchase and hold”; and (iii) also suspends “the required timeframes for the occupancy or disposal of properties not being used to conduct business or that have been abandoned.”
FFIEC updates BSA/AML examination manual
On April 15, the FFIEC published the updated Bank Secrecy Act/Anti-Money Laundering Examination Manual (Manual). According to an interagency statement, revisions were made throughout the updated sections to incorporate regulatory changes since the Manual was last updated in 2014 and “to ensure language clearly distinguishes between mandatory regulatory requirements and supervisory expectations.” The revisions can be identified by a 2020 date in the table of contents and include:
- Examiners should tailor Bank Secrecy Act/anti-money laundering (BSA/AML) examinations to a bank’s risk profile.
- Examiners should assess the adequacy of an institution’s BSA/AML compliance program and risk assessment processes. This includes identifying specific risk categories unique to a bank and analyzing the identified information to asses risks within these categories. The Manual notes, however, that there is no particular format or method for a bank to use for its risk assessment process, and reiterates that risk categories may vary based on a bank’s size, complexity, and organizational structure and that “updates may occur as necessary to align the risk assessment with a significant change in a bank’s risk profile.”
- Examiners should be mindful that banks have flexibility when designing a BSA/AML compliance program and that “minor weaknesses, deficiencies, and technical violations alone are not indicative of an inadequate program.”
The agencies acknowledge that they “are aware of the uncertainty faced by financial institutions during this unprecedented time” and emphasize that the updated Manual, “which supports tailored examination work, has been in process for an extended period and should not be interpreted as new instructions or as a new or increased focus.” Additional updates to the remaining Manual sections will be released in phases at a later date.
Supreme Court schedules oral arguments to review TCPA debt collection exemption
On April 15, the U.S. Supreme Court announced it will hear oral arguments via telephone conference on May 6 in a case concerning an exemption to the TCPA that allows debt collectors to use an autodialer to contact individuals on their cell phones without obtaining prior consent to do so when collecting debts guaranteed by the federal government. As previously covered by InfoBytes, the U.S. Court of Appeals for the Fourth Circuit held that the government-debt exemption contravenes the First Amendment’s Free Speech Clause, and found that the challenged exemption was a content-based restriction on free speech that did not hold up to strict scrutiny review. The petitioners—Attorney General William Barr and the FCC—ask the Court to review whether the government-debt exception to the TCPA’s automated-call restriction is a violation of the First Amendment, and if so, whether the proper remedy is to sever the exception from the remainder of the statute.
Multiagency advisory warns of North Korean cyber-threat to international finance system
On April 15, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), in conjunction with the Departments of State and Homeland Security and the Federal Bureau of Investigation, issued an advisory warning that North Korea’s (DPRK) cyber activities—including cybertheft, money laundering, extortion, and cryptojacking—“pose a significant threat to the integrity and stability of the international finance system.” These activities, the agencies caution, highlight DPRK’s use of cyber-enabled means to generate revenue while mitigating the impact of OFAC-imposed sanctions. In addition to providing examples of cyber activities that target the international financial sector and DPRK state-sponsored cyber incidents, the advisory also outlines recommended measures that governments, industry, civil society, and individuals can take to counter DPRK cyber threats. These include (i) raising awareness; (ii) sharing technical information; (iii) implementing and promoting cybersecurity best practices; (iv) notifying law enforcement; and (v) strengthening anti-money laundering, countering the financing of terrorism, and counter-proliferation financing compliance. The agencies reiterate the consequences of engaging in prohibited and sanctionable conduct, and remind individuals and entities that OFAC has the authority to impose sanctions on any persons found to have engaged in conduct supporting DPRK cyber-related activity. The agencies also point out that foreign financial institutions that knowingly conduct or facilitate significate trade or transactions on behalf of a designated person for DPRK-related activity, may “lose the ability to maintain a correspondent or payable-through account in the [U.S.]”
Delaware check seller and money transmitter license required to transition to NMLS by June 15
On April 15, NMLS published a Delaware Check Seller and Money Transmitter License requirements checklist for a new application, amendment, surrender, and license transition to NMLS. Per Delaware’s recent mandate, as detailed in APPROVED’s post from April 7, new license applicants and existing licensees will be required to use NMLS beginning April 15, 2020. All existing licensees have until June 15, 2020 to submit their license transition requests through NMLS.
Please see the full requirements for transitioning the license to NMLS here.
FTC seeks injunction against company posing as SBA lender
On April 17, the FTC filed a complaint against a Rhode Island-based company and its owner (defendants) for allegedly violating the FTC Act by claiming to be an approved lender for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) even though the defendants are neither affiliated with the SBA nor are they an SBA-authorized lender. The FTC alleges in its complaint that the defendants made deceptive statements on their websites, such as “WE ARE A DIRECT LENDER FOR THE PPP PROGRAM,” and directly contacted small businesses claiming to be representing the SBA in order to solicit loan applications on behalf of the businesses’ banks. The FTC states that the defendants have received hundreds, if not thousands, of loan applications from businesses and continue to claim they can make PPP loans despite receiving a cease-and-desist letter earlier this month from the SBA. The FTC seeks injunctive relief to prevent the defendants from continuing to engage in the unlawful acts and practices, as well as “rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief” that the court deems necessary to redress any consumer harm, and an award of the costs for bringing the action.
Fed issues rule to temporarily allow bank insiders access to PPP
On April 17, the Federal Reserve Board (Fed) announced an interim final rule to allow “certain bank directors and shareholders” to apply for loans from the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). The rule will temporarily suspend some of the requirements of Federal Reserve Act Section 22(h) and Regulation O, to permit banks to extend credit to bank insiders, but only for PPP loans. This announcement comes after the SBA recently issued its own interim final rule regarding eligibility of directors and shareholders to apply for PPP loans for their own small businesses. The Fed’s interim final rule is effective upon publication in the Federal Register and comments must be received within 45 days of publication.