Compliance Alerts

February 2019

 

Effective State Changes     

ILLINOIS

The State of Illinois has adjusted its document preparation fee for the year 2019 to $179.81. Effective January 1, 2019.

The Payday Loan Reform Act allows an Illinois lender to charge a $3 fee for verifying a borrower’s information and ability to enter into an installment payday loan.

The fee increases from $1 on July 1, 2020.

 

MASSACHUSETTS

HB 4086 was signed into law on January 10, 2019 and establishes and modifies certain laws regarding consumer financial and credit information. The new statutes

prohibit an employer, potential landlord, or other user from requesting or obtaining the credit report of a consumer unless the user first obtains the prior written, verbal

or electronic consent of the consumer, and discloses the user's reason for accessing the consumer report.

 

MICHIGAN

The State of Michigan has adjusted its “Doc Fee” under the Motor Vehicle Sales Finance Act to $220.00 for the following two years. Per Bulletin 2019-01-CF, the

documentary preparation fee is adjusted based on the consumer price index and shall not exceed 5% of the cash price of the vehicle or $220.00, whichever is less.

Effective January 11, 2019.

 

NEW YORK

On December 28, 2018, the governor signed SB 86886 into effect which prohibits consumer credit reporting agencies from charging a fee for the placement,

removal, or temporary lift of a security freeze following consumer credit reporting agency data breaches.

 

OHIO

On December 19, 2018, the governor signed Senate Bill 273 and enacted Section 3965.01-11 of the Ohio Code to “establish standards for data security and for the investigation

of and notification to the Superintendent of Insurance of a cybersecurity event.” The Bill codifies new obligations for insurance companies authorized to do business in the state,

including the requirement to implement and maintain an information security program based on the results of a risk assessment and develop an incident response plan for a

defined cybersecurity event. Effective March 19, 2019.

 

WASHINGTON D.C.

On January 23, 2019 the Mayor signed into effect an order establishing in the Executive Branch of the District of Columbia’s government a Financial Services Regulatory Sandbox

and Innovation Council. Within six months the Council shall produce a report to the Mayor of legislative, programmatic, and policy recommendations after investigating the feasibility

of developing a regulatory sandbox for financial services to test innovative products, services, business models, and

delivery methods. Effective January 23, 2019.

 

 

Effective Federal Changes

CONSUMER FINANCIAL PROTECTION BUREAU

The Consumer Financial Protection Bureau (“CFPB”) is proposing amendments to 12 CFR Part 1041—Payday, Vehicle Title, and Certain High-Cost Installment Loans rules—that would

allow lenders to extend short-term, high-cost loans to consumers without satisfying the regulatory underwriting requirements. The stated rationale for these amendments is that the

underwriting requirement was adopted without enough evidence or legal support. Additionally, consumers’ access to credit in states that permit payday and other short-term loans

would be restricted. The CFPB’s rule was adopted on Oct. 5, 2017 with most terms to take effect on Aug. 19, 2019. The Bureau is proposing to extend the compliance date of the rule’s

underwriting duties by 15 months which would in effect eliminate the requirements before the August effective date.