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HUD announces multifamily mortgage payment relief
On April 13, HUD announced new measures for FHA-approved multifamily mortgagees regarding the implementation of CARES Act forbearance. The guidance stipulates that servicers must grant multifamily borrowers who experience financial hardships due to Covid-19 and request assistance up to 90 days of forbearance, and may grant this forbearance without receiving direct approval from HUD provided they follow guidance outlined in Mortgagee Letter 2020-09 (covered by InfoBytes here). As required by the CARES Act, all owners and agents of FHA-insured multifamily properties and properties participating in HUD multifamily assisted housing programs must also cease all evictions of tenants for non-payment of rent for 120 days. The guidance also outlines the standard multifamily forbearance protocol, which is intended to streamline processing for borrowers, servicers, and lenders. The protocol stipulates that HUD is (i) “allowing servicers to grant, without HUD approval, up to 30 days of forbearance for borrowers experiencing a financial hardship due to COVID-19 if the borrower was current on their mortgage payments as of February 1, 2020”; (ii) “allowing automatic forbearance extensions from servicers to borrowers for up to two additional 30-day periods, without HUD approval”; and (iii) “encouraging borrowers to enter into repayment plans with renters (residential and commercial) that experience an income reduction or temporary loss of household income but are able to make up the difference over time, without HUD approval.”
States ask Treasury to exempt stimulus payments from garnishment and urge CFPB to “vigorously enforce” FCRA
On April 13, a coalition of state attorneys general and the Hawaii Office of Consumer Protection (states) sent a letter to Treasury Secretary Steven T. Mnuchin, calling for immediate action to ensure that stimulus checks issued under the CARES Act to consumers affected by the Covid-19 pandemic are not subject to garnishment by creditors and debt collectors. While the CARES Act does not “explicitly designate these emergency stimulus payments as exempt from garnishment,” the states claim that a “built-in mechanism” contained within a provision of the CARES Act can rectify the legislative oversight. Specifically, the states point to Section 2201(h), which “authoriz[es] Treasury to issue ‘regulations or other guidance as may be necessary to carry out the purposes of this section,’” and ask Treasury to immediately designate the stimulus checks as “‘benefit payments’ exempt from garnishment.”
The same day, another coalition of state attorneys general sent a letter to CFPB Director Kathy Kraninger urging the Bureau to rescind an April 1 policy statement directed at consumer reporting agencies (CRAs) and furnishers (covered by InfoBytes here) that stated the Bureau will take a “flexible supervisory and enforcement approach during this pandemic regarding compliance with the Fair Credit Reporting Act [(FCRA)] and Regulation V.” According to the states, the policy statement suggests that the Bureau does not plan on enforcing the CARES Act amendment to the FCRA, which requires lenders to report as current any loans subject to Covid-19 forbearance or other accommodation. The Bureau’s decision, the states contend, may discourage consumers from taking advantage of offered forbearances and other accommodations. The states also argue that allowing CRAs to take longer than the FCRA-prescribed 30 days to investigate consumer disputes puts consumers at risk. The states stress that the recent increase in Covid-19 scams has heightened the need for the Bureau to vigorously enforce the FCRA, and that, moreover, the thousands of complaints received by the states, FBI, FTC, and DOJ concerning phishing and other scams designed to gather consumers’ financial information have highlighted identity theft risks. The states emphasize “that even if the CFPB refuses to act. . .we will not hesitate to enforce the FCRA’s deadlines against companies that fail to comply with the law.”
CFPB issues guidance allowing pandemic relief payment distribution with prepaid cards
On April 13, the CFPB issued an Interpretive Rule (IR) addressing the “Treatment of Pandemic Relief Payments Under Regulation E and Application of the Compulsory Use Prohibition.” Pursuant to the CARES Act, many consumers are entitled to pandemic relief payments, generally provided through direct deposit to the consumer’s bank account. When that information is unavailable, or when the consumer does not have a bank account, the IR allows government agencies to provide the economic impact payments via alternative means, including by issuing prepaid account cards. However, the Electronic Fund Transfer Act and implementing Regulation E prohibit government agencies from requiring consumers to “establish accounts for receipt of electronic fund transfers with a particular financial institution as a condition of receipt of a government benefit. ” According to the IR, the “compulsory use prohibition” will not apply to prepaid cards and the Covid-19 relief payments will not be classified as government benefits, provided the cards fulfill certain requirements. In order to not be considered “government benefits” the payments must: (i) be to aid consumers impacted by Covid-19; (ii) not be “part of an already-established government benefit program”; (iii) be distributed “on a one-time or otherwise limited basis”; and (iv) not require consumers to apply for the funds.
Rhode Island governor issues executive order on shareholder meetings
On April 10, Rhode Island Governor Gina Raimondo issued an executive order mandating that all shareholder annual and special meetings must be held remotely due to the Covid-19 crisis. The order will remain in effect until May 8, unless renewed, modified, or rescinded.
SEC issues statement regarding requirements for Form 144 paper filings in light of Covid-19
On April 10, the SEC Division of Corporation Finance issued a statement regarding requirements for Form 144 paper filings in light of Covid-19. For those who submit Forms 144 for the period from and including April 10, 2020, to June 30, 2020, the Division staff will not recommend enforcement action if Forms 144 are submitted via email in lieu of mailing or delivering the paper form to the SEC (as required under Rules 101(b)(4) or 101(c)(6) of Regulation S-T) if the filer or submitter attaches a complete Form 144 as a PDF attachment to an email sent to the SEC. The division also will not recommend enforcement action if the filer or submitter provides a typed form of signature in lieu of the manual signature, provided certain requirements are met.
Washington regulator issues Covid-19 FAQs to credit unions
The Washington Department of Financial Institutions, Division of Credit Unions issued two FAQs addressing Covid-19 related issues. In the first, the division clarified that a safety deposit box is considered an essential function, and that credit unions should make every effort to allow members continued access. In the second FAQ, the division explained that the governor of Washington authorized electronic notarial acts, and that credit unions may provide remote notarial services.
Alaska governor announces temporary suspension of state regulations as part of Covid-19 emergency measures
On April 10, Alaska Governor Mike Dunleavy announced a temporary suspension of certain state fees, statutes, and regulations through May 11, including those imposed by the Department of Commerce. Governor Dunleavy cited his aim for the temporary suspension as exploring ways to “lessen the burden of state government on Alaska’s families and businesses…” during the Covid-19 crisis.
Connecticut governor issues executive order providing protections to renters
On April 10, the Connecticut governor issued an executive order that, among other things, provides protections for residential renters impacted by Covid-19. For example, renters are provided an automatic 60-day grace period for April rent and, upon request, a 60-day grace period for May rent. In addition, no landlord, or landlord’s representative may deliver notice to evict except in the case of serious nuisance.
Missouri secretary of state announces approved remote notary vendors
On April 10, Missouri’s secretary of state announced three approved electronic notary service providers, noting that additional vendors are expected to be approved at a later time. The announcement came in light of the state’s shift to remote practices in response to the Covid-19 crisis.
Maryland secretary of state provides updated guidance on remote notarizations
On April 10, Maryland’s secretary of state provided updated guidance regarding the waived in-person notarization requirement as part of the state’s Covid-19 response. The guidance provides requirements for performing remote notarizations, lists remote notary vendors, and provides a brief set of FAQ pertaining to remote notary practices in general. The temporary waiver of the in-person notarization requirement was ordered by Governor Hogan on March 30, and is set to expire when the declared state of emergency lifts.