A group of 27 states, led by Arkansas and Texas, is seeking leave to file a complaint with the U.S. Supreme Court to challenge Delaware’s unclaimed property laws. The states’ challenge centers on a Delaware escheat law through which the state claims ownership of certain types of financial accounts and securities if the owner has failed to claim them for three years, and the issuer or holder is incorporated in Delaware. The dispute, although broad in implications, addresses a specific situation whereby a money transfer company was directed to provide all unpresented and uncashed money transfers to Delaware Escheator, and not to the states where the transfers were originated. The states claim that the Delaware law is in contravention to the federal Disposition of Abandoned Money Orders and Traveler’s Checks Act.
On September 16, California Governor Jerry Brown signed AB 2354, a bill that expands the definition of a “vehicle service contract” to include agreements to repair, replace, or maintain any of the vehicle’s mechanical components, conditioned upon the use of a specific lubricant, treatment, fluid, or additive. The law goes into effect on January 1, 2017. In similar fashion, the Missouri legislature recently voted to override the Governor’s veto of HB 1976, thus expanding the definition of “extended service contracts” to include tire and wheel replacement, dent repair, key and key fob replacement, and other ancillary services as approved by the Director of Insurance. The Missouri law will also eliminate the requirement that a provider pay a full refund to the contract holder if the contract is cancelled during the initial 20-day period, providing instead the option to give a credit to the contract holder or a specified designee.
On August 30, the State Regulatory Registry LLC (SRR), a subsidiary of the Conference of State Bank Supervisors (CSBS) and the entity that operates the Nationwide Multistate Licensing System and Registry (NMLS), requested public comment on a proposal to adopt a formal policy that would govern procedures and processes for requesting comments on NMLS-related updates that impact outside parties. Proposed matters warranting public comment would include (i) major NMLS functionality updates; (ii) call report updates; (iii) impacts to NMLS usability; (iv) Uniform Form changes; and (v) fee changes. SRR proposes that the comment period for NMLS-related updates last for at least 60 days but no longer than 180 days unless, as determined by the SRR Senior Vice President of Policy, there is good cause for extending the comment period. Comments on SRR’s proposed policy change, which defines the roles and responsibilities of various persons and working groups that would be involved in considering proposed NMLS updates, are due by October 31, 2016.
Last week, Minnesota AG Lori Swanson filed a lawsuit against a debt collection company, alleging that it repeatedly attempted to collect on debts that consumers did not owe, and made unlicensed collection calls to individuals, their relatives, and their co-workers. According to AG Swanson, the company pursued “phantom” debts against consumers, threatening non-compliant individuals with lawsuits and arrests. AG Swanson further asserts that the company “failed to inform people of their legal right to dispute the ‘debt’ and refused to provide verification of the ‘debt’ when people asked questions.”
On September 22, the Massachusetts Division of Banks (the Division) and AG Healey’s office will host an informational session to discuss the current state of debt collection and industry regulation in Massachusetts. The Division and AG Healey seek responses to questions regarding how the debt collection industry has changed in recent years; the industry’s organizational structure; licensing requirements for debt collectors and debt buyers; law firm involvement in debt collection activities; notification requirements regarding whether a debt has been sold; debt collection issues, including litigation-related problems, that consumers and industry members face; and how changes in federal laws and regulations governing debt collection practices should be reflected in Massachusetts’s regulations. Written responses and comments to the Division are due by October 21, 2016.