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New York governor provides regulatory relief
On April 7, the governor of New York issued an executive order authorizing the superintendent of Financial Services to issue emergency regulations waiving late fees and prohibiting the reporting of negative data to credit bureaus. The order also authorized remote notarial acts.
Fannie Mae provides Covid-19 forbearance guidance for multifamily lenders and servicers
On April 7, Fannie Mae issued a letter providing Covid-19 forbearance process guidance for multifamily lenders and servicers. In particular, multifamily lenders and servicers are required to use the Multifamily Asset Management Portal (MAMP) to submit delegated forbearance notifications and supporting documentation, and complete and submit reporting on delegated forbearance notifications using the Delegated Forbearance Tracking spreadsheet on the first business day of each week. Non-delegated forbearance requests must also be submitted through MAMP.
Louisiana Office of Financial Institutions declares emergency for state-chartered entities
On April 7, Louisiana Office of Financial Institutions (OFI) Commissioner John Ducrest declared a state of emergency and issued guidance for state-chartered financial entities in response to the Covid-19 crisis. The order granted: (i) Louisiana-based entities blanket parity with federally-chartered entities to offer Small Business Administration Paycheck Protection Program loans; and (ii) state-chartered financial institutions the authority to temporarily close or relocate branch offices, or otherwise reduce operations, services, and products. The order also provided guidance for reporting operational changes to OFI and adjusted annual meeting requirements to allow for remote conferencing. The declared state of emergency is set to extend through April 30, unless otherwise extended or renewed.
New York Department of Financial Services shares guidance on insurance notice obligations
The New York Department of Financial Services published guidelines for insurance producers, such as agents and brokers, on providing electronic notices during the Covid-19 emergency. The guidance reduced the burden of standard notice obligations for producers that must comply with new 11 NYCRR § 229.5(b) and 3 NYCRR § 405.6(b)(4) requirements. Specifically, the issuance enabled notices to be communicated by email, regardless of consumer consent, and encouraged producers to share information regarding notice obligations on their websites and via social media.
Agencies revise reporting guidance during Covid-19 pandemic
On April 7, the Federal Reserve (Fed), FDIC, OCC, CFPB, and NCUA (agencies) issued a revised interagency statement for financial institutions regarding loan modifications for customers affected by Covid-19. As previously covered by InfoBytes, the agencies issued the initial interagency statement on March 22, which stated that the agencies would not require loan modifications made as a result of Covid-19 to be categorized as troubled debt restructurings (TDRs), and additionally that the agencies would not criticize implementation by financial institutions of credit risk mitigation procedures.
Among other things, the revised interagency statement encourages financial institutions to continue to adhere to consumer protection laws, such as fair lending laws, as they assist borrowers who have been negatively impacted by Covid-19. The agencies take a favorable view of loan modification programs intended to assist borrowers affected by Covid-19 and note that financial institutions will not be criticized “for working with borrowers in a safe and sound manner.” In addition, with respect to credit risks, examiners will refrain from issuing automatic adverse risk ratings when reviewing loan modifications impacted by Covid-19. The revised statement explains that the CARES Act created a forbearance program for borrowers affected by Covid-19, and that under Section 4013 of the Act, financial institutions are not required to “report section 4013 loans as TDRs in regulatory reports.” Furthermore, deferrals granted to borrowers affected by Covid-19 do not need to be classified as “past due because of the deferral.”
Maryland commissioner of Financial Regulation announces suspension of Notice of Intent to Foreclose Electronic System
On April 6, the Maryland commissioner of Financial Regulation issued an industry advisory announcing the temporary suspension of the Notice of Intent (NOI) to Foreclose Electronic System. The suspension takes effect on April 10, and the system will not accept new NOIs during the state of emergency period, effectively preventing the initiation of residential foreclosures. The announcement noted that the system will remain functional until the April 10 suspension deadline to accommodate NOIs submitted prior to Governor Hogan’s April 3 executive order calling for a moratorium on residential foreclosures in response to the Covid-19 crisis.
California Department of Business Oversight issues advisory to small businesses with merchant cash advance contracts
On April 6, the California Department of Business Oversight (DBO) issued an advisory to small businesses with merchant cash advance contracts. Small businesses are encouraged to review the terms of their existing financing products to determine whether they may be entitled to relief and report finance companies that fail to honor contractual terms that provide relief. The DBO notes that payments under certain financing arrangements are typically adjustable and may be lowered if the small business is closed as a result of government orders.
Florida Office of Financial Regulation issues guidance regarding steps taken to keep staff and stakeholders safe
In April, the Florida Office of Financial Regulation (OFR) provided information regarding its staff and stakeholders. The guidance provides that OFR is closed to the public and staff are teleworking. Further, registration staff are continuing to process registration applications and examination staff are conducting streamlined, remote examinations using phone and email correspondence.
Delaware directs check sales and money transmitter licensees to use NMLS
The Delaware Office of the State Bank Commissioner issued a directive that, beginning on April 15, all Chapter 23, Sale of Checks and Transmission of Money Licensees are advised to use the Nationwide Mortgage Licensing System for applications, renewals, surrenders and amendments.
Washington regulator urges credit unions to work with troubled borrowers
On April 6, the Washington Department of Financial Institutions, Division of Credit Unions issued guidance urging credit unions to assist borrowers with reduced ability to repay their debt obligations, including waiving fees, increasing credit card limits for creditworthy borrowers, restructuring commercial loans, offering payment and loan modifications, ensuring continuation of mortgage servicing, and refraining from reporting late payments to credit reporting agencies. The Division emphasized that it would not criticize credit union’s efforts to accommodate members in a safe and sound manner, even if this reduces capital and earnings.