The California State Legislature provided commercial lenders with welcome news this week when the California Senate passed Senate Bill 577 (“SB 577”).  If it is signed by the governor, SB 577 will reinstate the de minimis exemption from the California Financing Law (“CFL”) for lenders making a single commercial loan of $5,000 or more in

Earlier this month, both Kentucky and Virginia enacted significant legislation related to student loan servicing. Kentucky joined the ever-growing list of states to pass legislation regulating student loan servicing activities while Virginia pared back its existing student loan servicing law.

Kentucky’s new Student Education Loan Servicing, Licensing, and Protection Act of 2022 (“KY Law”) will

On April 11, 2022, Virginia became the second US state to require providers of merchant cash advance (“MCA”) products to obtain a state regulatory license or registration—hot on the heels of Utah. With Governor Glenn Youngkin’s signing House Bill 1027 into law, companies providing “sales-based financing” in Virginia will now be required to provide up-front

Marketplace lender Opportunity Financial, LLC has gone on the offensive against the California Department of Financial Protection and Innovation to protect its bank partnership program against challenge on a “true lender” theory. On March 7, 2022, OppFi filed suit against the DFPI to ask the state court to declare that FinWise Bank, a Utah-chartered bank,

The California Department of Financial Protection and Innovation (“DFPI” or the “Department”) will have no shortage of applications to process before year end.  Last week, the DFPI reminded industry participants that, beginning on September 1, 2021, it will make available through the Nationwide Multistate Licensing System (“NMLS”) the application needed to apply for a license under the Debt Collection Licensing Act (“DCLA”).  Passed in September of 2020, the DCLA (SB 908) requires any person engaged in the business of debt collection, which includes debt buyers, to apply for a license on or before Friday, December 31, 2021, in order to continue to operate as a debt collector in California when the DCLA goes into effect on January 1, 2022.  Failure to submit an application by the December 31st application deadline will preclude a debt collector from lawfully operating as a debt collector until the issuance of a license (Fin. Code §§ 100000.5, 100001(a)).  For more details,  the DFPI has published a series of Frequently Asked Questions (FAQs) at:  Debt Collectors: Frequently Asked Questions | The Department of Financial Protection and Innovation (ca.gov).

Also, nearly two years after publishing a Notice or Proposed Rulemaking that will require all California Financing Law (“CFL”) licenses to be issued through the NMLS, and one day prior to an extended NMLS maintenance period (covered in our prior blog post), the DFPI announced that existing  CFL licensees are now eligible to begin transitioning their licenses to the NMLS.   Oddly, the announcement was made two days prior to the July 22nd end date for the comment period relating to the most recently proposed modifications to the proposed rules (see  Fifth Notice of Modifications to Proposed Regulations).  Upon final approval of  the regulations, it is expected that all CFL licenses will be issued through the NMLS by December 31, 2021.  This change may not be welcome for entities that do not presently have an NMLS record because establishing a Company Record through the NMLS to transition an existing CFL license onto the system is a separate process that takes time and effort.

Given the typical processing times (usually 90 days) for CFL license applications and the upcoming NMLS renewal period that begins on November 1, 2021, CFL licensees that do not have an existing NMLS Company Record should consider starting the transition process sooner rather than later. 
Continue Reading California Licensing Update

As many of us look forward to our summer vacations, the NMLS also has plans to take time off this summer.  Due to system maintenance, beginning Wednesday, July 21 at 8:00 p.m. ET, the NMLS and NMLS Consumer Access will be unavailable for four full days, July 22 through July 25, with an anticipated return to operations on Monday July 26 at 7:00 a.m. ET.  This maintenance period is significantly longer than previous maintenance periods, which typically occur over a weekend.  The system will be completely inaccessible during this time, meaning that all Company and Individual users will be unable to log into their record to make any filings or amendments to the record, or to review any status updates or licensing deficiencies. Regulators also will be unable to access the NMLS or NMLS Consumer Access during this maintenance period.  The NMLS Call Center will remain open during the system maintenance.

Below, we offer a few suggestions for users to ensure you and/or your Company are ready for the upcoming NMLS maintenance period:

Continue Reading NMLS and NMLS Consumer Access Scheduled to Take a Summer Break

Should US state nonbank mortgage servicers be subject to “safety and soundness” standards of the type imposed by federal law on insured depository institutions, even though the nonbanks do not solicit and hold customer funds in federally insured deposit accounts or pose a direct risk of a government bailout? Well, state mortgage banking regulators think

On September 25, California Governor Newsom signed Senate Bill 908, enacting the Debt Collection Licensing Act (the “DCLA”), placing California with the majority of states that require consumer debt collectors to be licensed. Subject to a few exemptions, persons engaging in the business of debt collection in California (including debt buyers) will be required to submit a license application before January 1, 2022. Senate Bill 908 is just one of a number of consumer protection bills enacted in California in recent days, including a bill creating the state’s “mini-CFPB.”

Continue Reading California Becomes the Latest State to License Debt Collectors

Mayer Brown is pleased to announce that Krista Cooley, a partner in our Financial Services Regulatory and Enforcement group, has recently expanded her existing practice to take the lead in managing our state licensing practice.  Krista is an experienced Consumer Financial Services attorney with over 19 years of experience.  In this role, Krista advises clients on compliance with the requirements of federal and state laws governing the licensing, approvals and practices of brokers, lenders, purchasers and servicers of mortgages and other consumer loan products, as well as sales finance companies, money service businesses and collection agencies. She also assists clients in navigating the complex state and federal licensing and approval process in connection with, among others, new business lines, legal entity conversions, restructuring and change of control transactions.

Stacey Riggin, one of our Government Affairs Advisors, and Dana Lopez, our Licensing Manager, work closely with Krista and will continue to oversee our team of five regulatory compliance analysts, each of whom has over ten years of experience working together on licensing matters.  Our team has decades of experience in managing nationwide licensing projects and assisting clients in obtaining approval with state and federal government agencies to engage in a variety of financial services related activities.  Our team also coordinates regulatory approvals needed to facilitate mergers, equity investments, stock and asset acquisitions, and servicing sales and transfers.

Continue Reading Mayer Brown Announces Consumer Finance Licensing Team Transition

After a number of failed efforts and amid the COVID-19 national emergency, Virginia enacted a law that requires student loan servicers to obtain a license. On April 22, 2020, Virginia House Bill 10 and the identical Senate Bill 77 (collectively, the “Legislation”) were enacted into law after state representatives agreed to certain recommendations made by Virginia’s Governor earlier last month. Although eleven other states require student loan servicers to obtain a license, registration, or make a notice filing, Virginia’s new law is unique in that it could reach a much wider range of companies.

Continue Reading Virginia Enacts One of the Broadest Student Loan Servicer Licensing Laws