Compliance Alerts

October 2020

 

Effective State Changes

 

CALIFORNIA

On September 25, 2020, the Governor signed Senate Bill 908 which enacted the Debt Collection Act (“DCLA”). The Act requires that anyone who engages in the business of debt collection—including debt buyers—must be licensed. Effective January 1, 2022.

 

INDIANA

On October 15, 2020, the Indiana Department of Financial Institutions published Emergency Rule LSA Document #20-549(E). This Rule adjusts the dollar amounts under the consumer credit code for sales, supervised loans and small loans. The applicable thresholds for sales and supervised loans remain unchanged. The threshold for small loans will move from $605 to $660. Effective January 1, 2021 – December 31, 2023.

 

SOUTH CAROLINA

On October 12, 2020, the South Carolina Department of Insurance published Orders 2020-03, 2020-04, and 2020-05 confirming Prima Facie Credit A&H and Credit Property rates for 2021. Under 2020-03, the Credit 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 remain as follows:

14-day Retro:                  
$1.53
30-day Retro:
$1.44

 

Under Order 2020-04, Credit Property rates for Automobile Fire and Theft, Automobile Collision, and Household Goods – Dual Interest, have decreased. Household Goods – Single Interest remains the same.

Under Order 2020-05, 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 – December 31, 2021.

 

WISCONSIN

The Wisconsin Office of the Commissioner of Insurance released the Revised Prima Facie Credit Life and Credit Accident and Sickness Insurance rates on October 15, 2020.

Prima Facie Credit Life Insurance Premium Rates Per $100 Per Annum             

Single premium decreasing life: $0.38 
Joint premium decreasing life: $0.63
Single premium level life: $0.70 
Joint premium level life: $ 1.17 

 

Prima Facie Credit Life Insurance Premium Rates Per $1,000 Per Month

Single premium MOB life:                  $0.585 
Joint premium MOB life: $0.977 

 

Prima Facie Credit Accident and Sickness Premium Rates Per $100 Per Annum                                                                             

14 Retro: $1.01
14 Elim:                               $0.56
30 Retro:     $0.71
30 Elim:  $0.52

 

Effective January 1, 2021 – December 31, 2024.

 

Effective Federal Changes

 

CONSUMER FINANCIAL PROTECTION BUREAU

The Consumer Financial Protection Bureau (“CFPB”) has released updated FAQs for the Real Estate Settlement Procedures Act (“RESPA”) and Regulation X. This updated FAQ relates to kickbacks, fee arrangements, gifts, promotional activities, and marketing services agreements.

The FAQs cover:

  • An overview related to RESPA Section 8 generally, including what payments are prohibited and who is covered;
  • RESPA Section 8(a)’s prohibited activities;
  • Gifts and promotional activities under RESPA Section 8;
  • And marketing service agreements.

Update published October 7, 2020.

The CFPB has also released new rules proposing to establish an Advisory Opinion (“AO”) Program. AOs issued under the program would be considered interpretive rules under the Administrative Procedure Act. These AOs would be in response to a request for clarification on interpretive questions relating to statutes and rules regulated by the CFPB. Comments requested by November 6, 2020.

 

OFFICE OF THE COMPTROLLER OF THE CURRENCY

The Office of the Comptroller of the Currency (“OCC”) issued a final rule on October 27, 2020, to determine when a national bank or Federal savings association makes a loan and is considered the “true lender”. Under the rule, as of the date of origination, if a bank is the lender in the loan agreement or funds the loan made, it is named as the lender. This includes situations where there is a partnership between a bank and a third party, like a marketplace lender. Effective 60 days after publication in the Federal Register.