MA Division of Banks Releases 2015 Annual Report

Recently, the Massachusetts Division of Banks released its annual report for year-end 2015. The report provides a broad overview of the Division’s 2015 efforts related to, among other things, foreclosure relief, cybersecurity protection, mortgage and depository supervision, and corporate transactions. Notable 2015 updates outlined in the report include the Division (i) approving 24 new mortgage companies in 2015, which resulted in 497 mortgage brokers and lenders being licensed to do business in Massachusetts; (ii) expanding its coordination, cooperation, and participation with the CFPB, Multi-state Mortgage Committee, and the New England Regional Mortgage Committee through sharing information in concurrent examinations of non-depository mortgage entities; and (iii) increasing oversight of the financial industry’s information technology environment, including collaborating with the Conference of State Bank Supervisors to host an event for Massachusetts bankers about common cybersecurity situations. The report includes objectives for 2016, including such as implementing and enforcing “consumer protection laws and regulations while providing consumers the information they need to know their rights and make informed financial decisions.”

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California DBO Publishes Report on Lender and Servicer Data

On July 11, the California Department of Business and Oversight (DBO) published its 2015 Annual Report: Operation of Lenders and Servicers under the California Residential Mortgage Lending Act, which compiles consolidated data from unaudited annual reports filed by mortgage lenders and servicers licensed under the California Residential Mortgage Lending Act. Notably, the report identifies a significant increase in the number and aggregate principal amount of mortgage loans that were originated by such licensees in 2015 as compared to 2014 (an increase of 47.3 percent and 56.7 percent, respectively). Additionally, among other things, the aggregate principal amount of mortgage loans serviced by such licensees increased each month in 2015 compared to 2014 (by 7.4 percent), while the number of foreclosures reported by such licensees somewhat decreased in 2015 compared to 2014 (by 3.6 percent).

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D.C. AG Racine Announces Settlement with Debt Collection Company

Recently, D.C. AG Karl Racine announced a settlement with a Maryland-based debt collector that allegedly engaged in unlawful and deceptive practices in violation of D.C.’s Consumer Protection Procedures Act and Debt Collection Law. According to the press release, the debt collector, among other things, allegedly collected costs and legal fees from consumers without obtaining a supporting court order, left voicemails to consumers in violation of applicable law, and failed to sufficiently inform consumers about their right to make a debt validation request. Pursuant to the order, the debt collector must, among other things: (i) pay $45,000 (subject to adjustment) to D.C. for its investigative costs; (ii) pay restitution to affected consumers; (iii) “clearly and conspicuously” disclose to consumers that have orally requested the verification of a debt to do so in writing; and (iv) not collect or attempt to collect any amount for “court fees,” as defined in the order, unless a judgment or order has awarded such fees.

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NYDFS Adopts Final Anti-Terrorism and Anti-Money Laundering Regulation

On June 30, the NYDFS adopted a final rule that requires regulated financial institutions to maintain a transaction monitoring program for potential BSA/AML violations and a filtering program intended to ban transactions prohibited by federal economic and trade sanctions. Further, the Board of Directors or Senior Officer(s) are required to submit annually, by April 15, a Board Resolution or Compliance Officer Finding, confirming the steps taken to ascertain compliance with the regulation and stating that, “to the best of the [Board or Officer’s] knowledge, the Transaction Monitoring and Filtering Program complies with [the regulation].” The law applies to Regulated Institutions, which include banks, trust companies, private bankers, savings banks and savings and loan associations chartered pursuant to the New York Banking Law, and all branches and agencies of foreign banking corporations licensed under the Banking Law to conduct banking operations in New York; and non-banks, which include check cashers and money transmitters licensed under the Banking Law. Read more…

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North Carolina Passes House Bill 289, Enacts the Money Transmitters Act

On June 30, North Carolina Governor Pat McCrory signed into law House Bill 289, submitted at the request of the Office of the North Carolina Commissioner of Banks (Commissioner).The Act, which enacts the newly revised North Carolina Money Transmitters Act, subjects certain virtual currency activities to licensure, as well as clarifies that the Act applies to activities that are for personal, family, or household purposes. Applicants seeking licensure must do so via the Nationwide Multistate Licensing System (NMLS) and in accordance with requirements set forth by the Commissioner. Regarding licensure, the “Commissioner has the discretion to require the applicant obtain additional insurance coverage to address related cybersecurity risks inherent in the applicant’s business model as it relates to virtual currency transmission and to the extent such risks are not within the scope of the required surety bond.” The Act purports to be effective as of October 1, 2015.

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