Military/Service Members

The California legislature was active in 2018, enacting several new requirements and provisions applicable to the financial services industry. Those requirements include an important and comprehensive privacy regime (the California Consumer Privacy Act of 2018, or CCPA), which establishes new protections for personal information that covered commercial enterprises collect. The CCPA becomes effective January 1, 2020, with implementing regulations due July 1, 2020.

However, many new California provisions become effective on January 1, 2019, including new foreclosure protections (and the reinstatement of certain protections from the California Homeowner Bill of Rights) and the exclusion of reverse mortgage loans from certain successor-in-interest protections. A new requirement to provide mortgage loan modification disclosures in the language in which they are negotiated (e.g., in Spanish, Chinese, Tagalog, Vietnamese, or Korean) becomes effective for covered entities once the regulator develops those disclosures.

California also imposed new restrictions and requirements applicable to debt collectors and a new licensing obligation for servicers of student loans, and expanded certain financial protections for servicemembers.

Read more about California’s active legislature in Mayer Brown’s recent Legal Update.

Characterized as “protecting veterans from predatory lending,” S.2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, passed by the United States Senate on March 14, 2018. If enacted, the bill would impose material conditions on the eligibility of non-cash-out refinancings for government guaranty under the Veterans Affairs Loan Guaranty Program. While the legislation has received significant attention for the loosening of certain requirements under the 2010 Dodd-Frank Act for banks and other depository institutions, this particular provision should be of significant interest to all lenders of government-insured or guaranteed residential mortgage loans.

Read More in Mayer Brown’s Legal Update.

Despite changes in leadership at numerous federal agencies, Washington D.C. continues to focus on lending to servicemembers. In December, Congress extended the time period for protections against foreclosure under the Servicemembers Civil Relief Act. Otherwise, those protections would have expired at the end of 2017.

In addition, the Department of Defense recently amended its Military Lending Act interpretive rule. Among other topics, the amendments address loans to purchase a motor vehicle or other property, and the extent to which the Act’s requirements exempt loans that finance amounts in addition to the purchase price.

Read more in Mayer Brown’s Legal Update.

New regulations under the federal Military Lending Act (“MLA”) that become effective next week will prohibit consumer loans to covered US Service members if those loans have a “military annual percentage rate” (“MAPR”) greater than 36 percent. The Defense Department’s regulations will impose that MAPR limit on additional types of consumer credit transactions (beyond just payday, vehicle title, and tax refund anticipation loans) to active duty members of the armed forces and their spouses/dependents. The regulations will also change how a lender may determine whether applicants are “covered borrowers” and modify the disclosures required for those borrowers.

The MLA’s enforcement provisions include criminal and civil liability for noncompliance and provide for a private right of action.

Read more about the new regulations in Mayer Brown’s Legal Update.