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In a March 30, 2021 announcement, the Biden administration announced that it would be extending relief to approximately 1.14 million student loan borrowers who previously were not covered under the CARES Act relief enacted last year. These are borrowers who have defaulted on loans issued pursuant to the Federal Family Education Loan Program (“FFELP”). Specifically, under the measure, borrowers who have defaulted on FFELP loans will not face further penalties (and will see penalties already assessed unwound) and will also see their current interest rates reset to 0%.[1] The Biden administration’s action will be retroactive to March 13, 2020—the day the governmental formally declared a state of emergency due to the COVID-19 pandemic—and will return FFELP loans that defaulted during this period to good standing, with credit bureaus asked to remove any related negative credit reporting, allowing the applicable borrowers to rehabilitate their credit scores.[2]…
Continue Reading Approaching Student Loan Relief Piecemeal: The Biden Administration Extends CARES Relief to Defaulted FFELP Student Loan Borrowers; Weighs Options for Further Measures

On March 23, 2021, Illinois Governor JB Pritzker signed into law Senate Bill 1792, enacting the Predatory Loan Prevention Act (PLPA) and capping interest at an “all-in” 36% APR (similar to the Military Lending Act’s MAPR) for a variety of consumer financing, effective immediately. The PLPA uses an expansive definition of interest, applies to…

As expected, New York has broadened the reach of its new commercial financing disclosure law less than two months after its enactment.

S.B. 5470 imposed a range of Truth in Lending-like disclosure requirements on a variety of commercial financing transactions. On February 16, 2021, New York Governor Andrew Cuomo signed S.B. 898 into law, clarifying…

On January 4, 2021, Representative Al Green of Texas, the Chairman of the Subcommittee on Oversight and Investigations for the House Financial Services Committee, re-introduced H.R. 166, titled the Fair Lending for All Act, a bill he previously introduced in 2019. The proposed bill would significantly revise the application and enforcement of the Equal Credit Opportunity Act (ECOA) and would further expand lenders’ collection and reporting obligations under the Home Mortgage Disclosure Act (HMDA). …
Continue Reading Re-introduced Fair Lending for All Act Proposes Stiffer ECOA Penalties and CFPB Testing Office

In late December 2020, New York Governor Andrew Cuomo signed S.B. 5470 into law, which will impose a range of Truth in Lending Act-like disclosure requirements on providers of commercial financing in amounts of $500,000 or less. The law will have a significant impact on providers beyond traditional commercial lenders, as it broadly defines “commercial…

The California legislature ended its legislative session late on Monday, August 31, 2020, by passing two significant bills that will be of interest to the state’s mortgage servicers and other licensees—AB 3088 and AB 1864.

AB 3088 imposes new forbearance-related requirements on mortgage servicers related to the COVID-19 pandemic (in addition to significant protections for tenants in California beyond the scope of this summary). AB 1864 renames, reorganizes, and grants new authority to California’s primary financial services regulator to create a “mini-CFPB”—although many licensees are exempt from the new authority. Governor Newsom has signed AB 3088 into law, which took effect immediately as an urgency measure, and is expected to follow suit with AB 1864 in the near future.

Below we summarize those provisions from the bills that are particularly relevant to California mortgage licensees and federal- and state-chartered depository institutions servicing mortgage loans in California.…
Continue Reading California Enacts Two Bills with Significant Impacts on Mortgage Licensees in the State

On May 15, 2020, the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act (H.R. 6800, or the “HEROES Act”). The legislation is a controversial behemoth. It would provide another round of stimulus checks and student loan forgiveness, impose a 12-month eviction moratorium, expand mortgage forbearance relief, provide a…

In a development that industry observers may have overlooked amid more pressing concerns caused by the COVID-19 pandemic, the Idaho legislature enacted a measure that will require mortgage servicers to be licensed by July 1, 2020, unless the date is extended. With last month’s enactment, Idaho joins the majority of states that license mortgage servicing and provides a useful reminder that, when things eventually return to some degree of normalcy, non-pandemic-related compliance obligations will remain. This blog post discusses Idaho’s new mortgage servicer licensing obligation and other pertinent provisions of the legislation.

The New Mortgage Servicer Licensing Obligation

Idaho House Bill 401 (“H401” or the “Bill”) amends the Idaho Residential Mortgage Practices Act (Idaho Code §§ 26-31-101 et seq.) (the “RMPA” or the “Act”) to include mortgage servicing among the activities that trigger licensing under the Act.…
Continue Reading Regulatory Life Goes On—Idaho Legislature Remained in Session During COVID-19 Pandemic to License Mortgage Servicers

How do documents get signed and notarized when the parties signing the documents are faced with stay-at-home orders?  While both the federal Electronic Signatures In Global And National Commerce Act and state-enacted versions of the Uniform Electronic Transactions Act authorize notaries to perform electronic notarizations, electronic notarization is different than remote online notarization (RON).  Without…

On Friday, March 27, 2020, the President signed into law a stimulus bill designed to provide emergency assistance for those affected by the COVID-19 national emergency (the “CARES Act” or “Act”) that includes certain temporary relief for federal student loan borrowers. The Act largely codifies the Department of Education’s previous announcement regarding temporary relief to federal student loan borrowers impacted by the COVID-19 national emergency and extends the timeline for the temporary relief measures.

The Act provides three primary relief measures to federal student loan borrowers whose loans are held by the Department of Education:

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Continue Reading School’s Out: Proposed Relief for Federal Student Loan Borrowers Impacted by COVID-19