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Massachusetts attorney general issues emergency regulation prohibiting certain debt collection practices
On March 27, the Massachusetts attorney general issued an emergency regulation that makes numerous standard debt collection actions an unfair and deceptive act or practice during the defined “state of emergency period.” Specifically, the emergency regulation prohibits both creditors and debt collectors from: (i) initiating, filing, or threatening to file any collection lawsuit; (ii) initiating or threatening to initiate any legal or equitable remedy for garnishment, seizure, attachment or withholding of wages, earnings, property or funds; (iii) initiating or threatening to initiate repossession of a vehicle; (iv) applying for, causing to be served or enforced, or threatening to apply for or enforce any capias warrant; (v) visiting or threatening to visit the household or place of employment of any debtor; and (vi) confronting or communicating in public with any debt regarding collection. In addition, the regulation also prohibits debt collectors from initiating phone calls with debtors, unless necessary to discuss a rescheduled court appearance or at the request of the debtor. These prohibitions do not apply to debts secured by mortgage on real property or debt owed by a tenant to an owner. The regulation will remain in effect for the early of: (i) 30 days after the lifting of the declared state of emergency; or (ii) 90 days.
Maryland Commissioner of Financial Regulation issues guidance on consumer credit
On March 27, Maryland’s Commissioner of Financial Regulation issued guidance on consumer credit. The guidance urges businesses to: waive late fees as well as online and telephone payment fees; forego negative credit reporting during the health emergency; offer modification, forbearance, and other loss mitigation options; reach out to borrowers proactively to provide information on available assistance; and ensure that all borrower-facing staff are fully informed regarding any assistance available, and are proactive in informing borrowers of such.
Illinois allows notaries to work remotely
On March 27, the Illinois secretary of state announced that Illinois notaries public are temporarily allowed to perform remote, online notarizations during the Covid-19 crisis. The temporary authority will expire when the governor’s disaster proclamation is rescinded.
FINRA provides guidance on Covid-19 impact on FINRA-administered exams
In March, FINRA announced that Prometric is closing its centers in the United States and Canada for a period of 30 days, starting March 18, 2020. Candidates for taking FINRA-administered exams who have an existing appointment may reschedule their appointment to a future date without incurring a rescheduling fee. In addition, FINRA will extend all enrollment windows that are currently open and scheduled to expire by the end of May.
North Carolina sets up “essential supplier” vetting process
North Carolina Emergency Management announced that it created a process to vet businesses to determine whether they are essential suppliers that can continue operations if emergency closures are declared. To seek a determination, businesses should email beoc@ncdps.gov, providing: 1. business name; 2. contact information; 3. why it is critical that the business continue operations; 4. business website.
NYDFS encourages insurance licensees to use E-Signatures
The NYDFS issued guidance encouraging regulated insurance persons to use and accept electronic signatures and records to facilitate insurance transactions in instances that cause no consumer harm. The NYDFS reminded licensees that both New York’s Electronic Signatures and Records Act and the federal Electronic Signatures in Global and National Commerce Act permit the use of electronic signatures and records if the consumer consents. The NYDFS also stated it does not require consumer consent be obtained in any particular way.
District of Columbia permits mortgage brokers and originators to work from home, delays reporting deadlines
On March 27, the District of Columbia Department of Insurance, Securities and Banking issued guidance to mortgage lenders, mortgage brokers and mortgage loan originators permitting them to work from non-licensed branches or locations during the Covid-19 outbreak. The guidance requires the maintenance of appropriate data protection and cybersecurity measures when working remotely. The department also extended the deadline for filing annual reports from March 31 to June 1. Finally, the guidance notes that all evictions of tenants and foreclosed homeowners on or before May 1 are stayed, and required mediation hearings are extended from 90 days to 120 days following the date of mailing of the notice of default.
CFPB issues guidance to student loan borrowers on Covid-19 debt relief
On March 27, the CFPB issued guidance on the student loan provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Pursuant to the Act, borrowers with federally held student loans will automatically have their loan principal and interest payments paused until September 30. Borrowers do not need to take any action to have their payments suspended and interest will not accrue during this period. The CFPB also provided additional guidance on the impact on privately held student loans and federal loans held by commercial lenders, and provided information to help borrowers avoid student loan debt relief scams.
West Virginia creates regulatory sandbox program
On March 24, the West Virginia governor signed HB 4621, which creates a state fintech regulatory sandbox program through the state’s Division of Financial Institutions (Division) that allows participants to temporarily test innovative financial products or services on a restricted basis without requiring a license under West Virginia law. Under the program, approved applicants will have 24 months from the date an application is approved to test their product or service within the state without being subject to state laws and regulations that normally would regulate such products or services, unless the Division determines otherwise. HB 4621 outlines requirements for participants, which include specific state consumer protection laws, time limitations, and reporting requirements. Additionally, the Division, upon written notice, may end a participant’s participation in the program at any time and for any reason. The program allows participants to request an extension of time up to 12 months after the end of the regulatory sandbox testing period in order to obtain a license or other authorization required by the law to continue to offer the product or service. The act takes effect on June 5.
SEC issues multiple whistleblower awards
On March 24, the SEC announced awards of over $570,000 to two whistleblowers for providing “significant information and assistance that helped the Commission bring multiple successful enforcement actions.” According to the formal order, the first whistleblower received an award of approximately $478,000, and the second whistleblower received an award of approximately $94,000. The SEC stated that the first whistleblower’s award was substantially higher because the information (i) helped the SEC bring antifraud charges related to conduct that was ongoing at the time the whistleblower reported the information to the SEC; (ii) played a critical role in the development of the case; and (iii) related to all the enforcement actions. In comparison, the second whistleblower’s information—while important—contributed to charges brought against only one of the respondents, the SEC stated.
Earlier on March 23, the SEC announced an award of over $1.6 million to a whistleblower in an enforcement action. According to the SEC’s press release, the whistleblower “provided helpful assistance early in the investigation, preserving Commission time and resources,” and “helped form part of the basis for charges brought in a successful enforcement action.” The formal order—which acknowledged that the allegations reported by the whistleblower “would have been hard to detect”—stated, however, that while the whistleblower “unreasonably delayed” reporting the allegations, the SEC chose not to factor in the delay as severely as it might have done had the delay occurred entirely after the Dodd-Frank Act established the whistleblower award program.
The SEC’s March 24 press release states that it has awarded 76 individuals a total of approximately $396 million in whistleblower awards since its initial award in 2012.