Compliance Alerts

 

 

May 2019

Effective State Changes     

 

ARIZONA

HB 2674 was signed by the Governor on April 22, 2019. The bill clarifies that Guaranteed Asset Protection Waivers are not insurance and provides a definition of Guarantee Asset Protection Waivers. Effective 90 days after sine die adjournment.

INDIANA

HB 1136 was signed by the Governor on May 6, 2019. The bill amends the Indiana Uniform Consumer Credit Code and addresses the allowable delinquency charge. The bill applies to consumer credit sales (§24-4.5-2-203.5) and consumer loans (§24-4.5-3-203.5). It changes the permitted delinquency charge from an adjustable amount to a set amount, depending on the transaction’s payment frequency. Delinquent payments are payments that are not paid within 10 days after the scheduled due date. Under the bill, the allowable delinquency charges are:

  • $5, if installments are due every 14 days or less
  • $25, if installments are due every 15 days or more; or
  • $25, on a single installment due at least 30 days after the sale or loan is made.

The bill adds a provision that states a creditor may not charge a delinquency charge if the only delinquency is attributable to a delinquency charge assessed on an earlier installment.

The bill also modifies the allowable transaction fees for a revolving loan account, stating the fee may not exceed the greater (previously the “lesser”) of 2% of the amount of the transaction or $10. SB 80 similarly changes the language to “the greater of.” Effective July 1, 2019.

HB 1237 became Public Law 245 on May 5, 2019. The bill retroactively creates a ceiling of $200 for a “fair” document preparation fee. The bill retroactively applies, effective July 1, 2013.

MARYLAND

HB 1154 and SB 693 modify the Maryland Personal Information Protection Act. The Act creates security breach investigation and notification requirements. Effective October 1, 2019.

NEW YORK

On April 29, 2019, the Department of Financial Services announced the appointment of Katherine A. Lemire to its newly created Consumer Protection and Financial Enforcement Division (also known as the “mini-CFPB”).

OKLAHOMA

SB 720 creates the Oklahoma Small Lenders Act. The bill creates a new license for “small lenders,” beginning on January 1, 2020. The bill terminates all Deferred Deposit Lending Act licenses, effective August 1, 2020. Under the new Oklahoma Small Lenders Act, a “small loan” is an unsecured loan that’s term is between 60 days and 12 months. To make a small loan, the lender must be licensed by the Department of Consumer Credit, beginning on August 1, 2020. The act specifies the applicable license requirements. It also creates disclosure requirements, including that each customer must be given a written explanation, in clear, understandable language, of the fees and charges to be charged by the licensee. Effective November 1, 2019.

SB 732 was signed by the Governor on April 25, 2019. The bill modifies the charges allowed for loans made pursuant to § 3-508B, as follows:

Loan Amount*                  Acquisition Charge                                    Handling Charge

Up to $29.99                     1/10 of the amount of principal              $1.00 per $5.00 of principal

$30.00-$35.00                 1/10 of the amount of principal              $3.00 per month

$35.01-$70.00                  1/10 of the amount of principal              $3.50 per month            

$70.01-$100.00                1/10 of the amount of principal              $4.00 per month

$100.01-$150.00              1/10 of the amount of principal              $4.50 per month

$150.01-$200.00             1/10 of the amount of principal              $5.00 per month

$200.01-$250.00            1/10 of the amount of principal              $5.50 per month

$250.01-$300.00            1/10 of the amount of principal              $6.00 per month

Effective November 1, 2019.

*Note: The Loan Amounts are as listed in the Code, but these are subject to the annual changes in dollar amounts by the Oklahoma Department of Consumer Credit. We reported the 2019 dollar adjustments in the April newsletter.  At the moment, there does not appear to be alignment between the provisions of this bill and the 2019 bracket adjustments.

TEXAS

The dollar amount brackets and ceilings subject to adjustment in the Texas Financial Code will increase as follows:

Consumer Loans – §342.201

(Add-On Rates)

$18 per $100 per annum of the cash advance to $2,130 plus,

$  8 per $100 per annum of the excess to $17,750

OR

(Simple Melded Rates)

30% per annum of the cash advance to $3,550 plus,

24% of the excess to $7,455 plus,

18% of the remainder to $17,750

Retail Installment Sales (“Other Goods”) – §345.055

$12 per $100 per annum of the principal balance to $3,550 plus,

$10 per $100 per annum of the excess to $7,100 plus,

$  8 per $100 per annum of the remainder.

Effective July 1, 2019.

WASHINGTON

HB 1071 regulates breaches of security systems that protect personal information. The bill adds new definitions relating to the “breach of the security of the system.” The bill amends certain notice requirements for breaches of particular types of data, such as username and password. The act also provides the specific information which must be included in a notice of a potential breach to the attorney general. Notice to consumers must be provided within 30 calendar days of when the breach was discovered (changed from 45 days). The bill identifies what constitutes compliance with the security requirements based on the type of institution (e.g. a financial institution as certain criteria). Effective March 1, 2020.