NYDFS Announces Senior Staff Additions

Last week, the NYDFS appointed Scott Fischer Executive Deputy Superintendent for Insurance and Laura E. Evangelista Deputy Superintendent for Insurance. Fischer joins the NYDFS from the New York Liquidation Bureau where he served as Special Deputy Superintendent. Previously, Fischer worked at the European Bank for Reconstruction and Development in London, served as Senior Counsel in the Office of General Counsel at the New York Insurance Department, and as Assistant AG at the New York State Attorney General’s Office. Evangelista most recently served as Vice President and Assistant General Counsel at an international insurance brokerage firm; previously, she was a commercial litigator in private practice.

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POSTED IN: Banking, Insurance, State Issues

New York AG Schneiderman Opines on Legality of Electronic Signatures for the Purposes of Online Voter Registration

This week, New York AG Schneiderman issued an opinion regarding the legality of online voter registration, including the use of electronically affixed handwritten signatures. The opinion is in response to a February 8 letter from Suffolk County seeking the AG’s opinion as to “whether State law permits Suffolk County to implement online voter registration through the use of an electronic signature or whether the signature requirements of N.Y. Election Law § 5-210(5)(d)(xi) require signatures to be handwritten or ‘affixed by hand.’” AG Schneiderman opined that because Election Law § 5-210(5)(d)(xi) does not specifically require a signature written with ink on a voter registration application, the law does not preclude an electronically affixed signature. In accordance with the Election Law, AG Schneiderman commented that the electronic signature must be of a “quality and likeness to a signature written with ink,” and that an applicant completing an online registration application must either (i) print and mail the application to the local board of elections, or have a third party print and mail the application; or (ii) personally appear at the local board of elections.

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New York AG Takes Action Against Credit Card Processing Company for Alleged Deceptive Practices

Recently, New York AG Schneiderman filed a lawsuit against a New York-based credit card processing company, several affiliated companies, and select owners and officers of the companies over alleged fraudulent and deceptive practices. According to the AG’s office, the companies “trapped small businesses into never-ending lease agreements for over-priced credit card processing equipment and abused the judicial process by suing to collect on [those] leases in the Civil Court of the City of New York, regardless of whether the debt is fraudulent, the claim is timely or legitimate efforts to terminate the lease were ignored.” The AG investigation found that the companies targeted small business owners through its deceptive practices, which included (i) inducing individuals to sign lease agreements without realizing they were doing so; (ii) falsely representing the lease as “free” or a way to save money; and (iii) falsely informing consumers that he or she could cancel the lease at any time. In addition, the AG investigation also revealed that in many instances consumers alleged that the signatures on the leases were not theirs or that material terms were added to the lease without their knowledge. AG Schneiderman also alleges that the companies harassed consumers with threatening phone calls and letters, asserting that consumers would be sued if they did not make the payments on their leases. According to AG Schneiderman, between 2010 and 2015, the companies filed over 30,000 collection actions in the New York City Civil Court (NYC Civil Court), and obtained more than 19,000 default judgments against individual consumers in NYC Civil Court since 2010. The AG’s lawsuit against the companies seeks to, among other things, (i) vacate default judgments against consumers; (ii) permanently prohibit the companies and its owners and officers “from continuing their deceptive business practices”; and (iii) pay restitution to consumers.

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POSTED IN: Consumer Finance, State Issues

Illinois AG Settles with New York Investment Bank Over RMBS Practices

Last week, Illinois AG Madigan announced a $41 million settlement with a New York-based investment bank for its alleged misconduct in connection with the marketing and selling of at risk residential mortgage-backed securities (RMBS) prior to the economic collapse in 2008. Specifically, according to an investigation led by AG Madigan’s office, the investment bank allegedly failed to disclose the actual risk of RMBS investments. Under the terms of the settlement, $16 million of the settlement funds will go toward consumer relief, with the remainder being distributed to the Teachers Retirement System of the State of Illinois, the State Universities Retirement System of Illinois, and to the Illinois State Board of Investment. Finally, the investment bank’s settlement with Illinois is part of a $5 billion national settlement led by the DOJ – as well as additional federal entities – and the state AGs of New York and California.

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POSTED IN: Banking, Mortgages, State Issues

Iowa Governor Signs Bill to Amend Motor Vehicle Purchase Agreement Requirements

On April 13, Governor Terry Branstad signed into law SF 2228, the Motor Vehicle Records and Dealer Licensing Act. The act amends Chapter 321 of Iowa Code 2016 to, among other things, require that the full price of the “documentary fee” included in the purchase of a motor vehicle be “clearly and conspicuously disclosed in any motor vehicle purchase agreement with the customer.” Defined as “a fee that may be charged to a customer by a motor vehicle dealer for the preparation of documents related to an application for motor vehicle registration and an application for issuance of a certificate of title, and the performance of other related services for the customer,” a documentary fee excludes costs or fees charged to a motor vehicle dealer or a dealer’s customer by a third party. For each vehicle sold in a transaction, a documentary fee is limited to $180, unless a form of electronic applications, titling, registering, and transfers is involved, at which point the documentary fee cannot exceed $155. Pursuant to SF 2228, the Department of Transportation must establish and implement a program to allow for electronic applications, titling, registering, and funds transfers for vehicles subject to registration by January 1, 2018.

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