Compliance Alerts

July 2020


Effective State Changes



On June 30, 2020 Senate Bill 462 was signed into law by Governor Brian Kemp. The law changes the Georgia Industrial Loan Act to the Georgia Installment Loan Act. It also makes the regulator of Georgia Bank Installment Loans the Department of Banking and Finance instead of the Industrial Loan Commissioner. The law’s structure is fundamentally the same as the Georgia Industrial Loan Act, but additional changes were needed to provide consistency throughout the Act. Effective immediately, applicable to installment loan agreements entered into on or after July 1, 2020.


House Bill 1039 provides for new written or electronic notifications to consumers who enter service contracts that contain lengthy automatic renewal provisions. Effective January 1, 2021.



On July 31, 2020, the South Carolina Department of Insurance published Bulletins 2020-07, 2020-08, and 2020-09 with proposed Prima Facie Credit A&H and Credit Property rates for 2021. The final rates will be published on or before October 1, 2020. Credit Property Insurance rates remain the same for Household Goods – Single Interest, while Automobile, Fire and Theft, Automobile Collision, and Household Goods – Dual Interest will be decreased by 10 percent from 2020 levels. The A&H rates for insurance sold in conjunction with consumer credit transactions in 2021 will remain unchanged from their current rates in 2020. The 12-month rate for $100 of Initial Insured Indebtedness will be as follows:

  • 14-day Retro: $1.53

  • 30-day Retro: $1.44

Pursuant to Order 2020-08, the 3-day retroactive A&H rate for insurance sold in conjunction with loans will remain at $0.28 per $5.00 of monthly indemnity. Effective January 1, 2021.



House Bill 942 provides increased incentives for Vermont residents to purchase battery or plug-in electric vehicles. Effective July 1, 2020.



Effective Federal Changes



Specific dollar threshold adjustments were announced on July 17, 2020 through the Consumer Protection Financial Bureau. The CPFB is required to make adjustments to dollar thresholds based on annual changes in the Consumer Price Index. Updates to the Ability to Repay/ Qualified Mortgage Rule, (“ATR/QM”) and Home Ownership Equity Protection Act (“HOEPA”), among others, were announced and become effective January 1, 2021.


HOEPA Annual Threshold Adjustments:

  • The adjusted total amount of the loan threshold will be $22,052, up from $21,980
  • The adjusted points and fees trigger will be $1,103, up from $1,099

ATR/QM Threshold Adjustments - To meet qualified mortgage criteria, the combined points and fees cannot exceed the following:

  • 8% of total loan amount for loans less than $13,783
  • $1,103 for loans greater than or equal to $13,783 but less than $22,052
  • 5% of total loan amount for loans greater than or equal to $22,052 but less than $66,156
  • $3,308 for loans greater than or equal to $66,156 but less than $110,260
  • 3% of total loan amount for loans greater than or equal to $110,260



The Federal Trade Commission released a Staff Report by the Bureau of Consumer Protection in July. Entitled “Buckle Up: Navigating Auto Sales and Financing.” The report highlights results from a previous study related to sales and financing which the Bureau encounters in their enforcement role.



On July 22, 2020, the Office of the Comptroller of the Currency (“OCC”) proposed a regulation regarding the ‘‘true lender’’ concept when third parties are involved with banks as marketplace lenders. Under their proposal, a bank makes a loan if, as of the date of origination, it is named as the lender in the loan agreement or funds the loan. Comments on this new regulation must be received by the OCC on or before September 3, 2020.