In the Strangest Year Ever, We’re Very Thankful and Wish You a Happy Thanksgiving

As everyone steps away from their (home) office to celebrate Thanksgiving, we wanted to count our blessings as we review this truly remarkable and unusual year. In addition to frontline healthcare workers, good WI-FI, food delivery services, and finally finding a mask that is comfortable, we are also thankful for the following:

1. The CARES Act Provided Millions of Americans with Mortgage Forbearances and Other Relief.

On March 27, 2020, President Trump signed the Coronavirus Economic Stabilization Act of 2020 (CARES Act). The legislation directed more than $2 trillion into fighting the COVID-19 pandemic and stimulating America’s economy for the duration of the pandemic, which is ongoing. The CARES Act has had significant impact on the mortgage industry, including a foreclosure and eviction moratorium on all federally backed mortgage loans, which is currently scheduled to expire December 31, 2020.

While we worry about what will happen when that moratorium ends, we are thankful that millions of Americans with federally backed mortgage loans could take advantage of up to 360 days of forbearances because they were in financial distress due to the pandemic. Many private lenders also offered forbearances to their customers, and a handful of states enacted state laws requiring forbearances. Did this also create confusion? Yes! But everyone’s goal was to help consumers.

The GSE also created a COVID-19 payment deferral program to resolve those forbearances – so we’re thankful for the CFPB’s Interim Final Rule creating an exception allowing servicers to offer such deferrals based upon an incomplete application.

We’re glad that many Americans benefited from the CARES Act’s credit reporting requirements, but we still wish the CFPB’s FAQ were clearer about post-accommodation reporting (FAQ10, we’re looking at you).

We are especially grateful for our bank and mortgage clients and proud of the way the industry has risen to the occasion to help borrowers in these difficult times. Bradley hosted a weekly COVID-19 Compliance Roundtable over the course of 2020, which spanned 27 weeks and included over 70 separate companies. It has been a wonderful opportunity to collaborate with our friends and clients and to stay in touch while social distancing. If you’d like to join our Roundtable, please contact us at COVID-FS@bradley.com.

2. We’re Thankful for Clarity, Guidance, and a Few Tools from the CFPB to Help Debt Collectors.

It may still be 2020, but one thing that isn’t entirely terrible is the CFPB’s new Debt Collection Rule. Sure, it’s not perfect, but we can all be thankful for some of the helpful tools and guidance provided by the CFPB in its October final rule. For instance, while we all wish the agency had expanded the use of limited content messages to email and text messages, debt collectors can be grateful for the ability to leave certain voicemails without worrying too much about the FDCPA’s third-party disclosure prohibitions. And while we didn’t get a much-needed bright-line rule for call frequency, the CFPB’s rebuttable presumption that seven phone calls in a seven-day period is not harassment is, like boxed stuffing, fair-to-middling. In addition, the CFPB’s guidance on electronic communications also helps clear up some of the ambiguity that comes with applying a 1977 statute to modern technology. Don’t get too excited though – the rule’s time, place, and medium restrictions, while clearing up some issues related to mobile phone communications, could pose some significant challenges for organizations coming into compliance. It is 2020 after all.

3. Remote Online Notarization (RON) Finally Became Widespread Due to the Pandemic.

We are grateful for practical improvements in 2020! Many states (finally) authorized remote e-notarization allowing our clients to close new loans and continue other business operations in 2020. In the earliest days of the COVID-19 pandemic, mortgage loan originators were naturally concerned about how new loans could be originated and closed without in-person closings. Thankfully, practical alternatives were available and were approved nationwide. The American Land Title Association reports that “48 states and the District of Columbia have either passed a RON law or issued an executive order” directed at the ability to utilize remote notaries to notarize documents.  

4. Borrowers in Chapter 13 Bankruptcy Can Get Extra Help When Impacted by COVID-19.

We’re thankful that Americans already struggling with their finances can get another two years to complete their bankruptcy plan. The CARES Act amended 11 U.S.C. § 1329 to allow for a Chapter 13 plan confirmed before March 27, 2020, to be modified to extend payments up to seven years if the debtor is experiencing a material financial hardship due to COVID-19. While not clearly stated under the CARES Act, bankruptcy judges have recently found that the debtor need not be current on their plan payments as of March 27 to take advantage of the plan modifications.

5. We Will Not Run Out of Privacy Guidance to Read Over the Winter.

2020 has been a cornucopia of privacy regulation. The California Consumer Privacy Act (CCPA) (finally) gave us final regulations, and the California Privacy Rights Act (CPRA) passed as well. We received updated guidance on adtech from the likes of Facebook and got the first peek at a “global privacy control,” as well as a bunch of new litigation. Not to mention that the CJEU effectively eliminated the privacy shield as a viable cross-border data transfer mechanism to the U.S.! We are grateful for having more than enough emerging privacy issues to get us through those long winter nights.

6. We’re Thankful That the End of the LIBOR Transition Is in Sight.

In a few short years, we’ve moved from “Can LIBOR be fixed?” to “What on earth will we replace it with?” to final timelines and transition plans. The risk of disruption was similar to the risk of that awkward Thanksgiving political argument: high. But thanks to strong leadership in the financial services industry, GSEs, and central banks, the markets that rely on stable sources of liquidity and coupon rates have a framework, deadline, and plan for transition to a new benchmark rate at the end of 2021.

7. We’re Thankful the Student Loan Industry Is Far from Boring!

This Thanksgiving, federal student loan borrowers (and many private student borrowers) can be thankful that the CARES Act and executive orders provide for the deferral of required payments through December 31, 2020. However, the deferral period is coming to an end (at some point) and student loan borrowers will have to resume payments. Yet, with the new administration coming aboard, proposed legislation in the House to allow bankruptcy discharges for student loans, and new student servicing laws in several states, 2021 promises to be an active year in the student loan arena – especially if the Biden administration seeks to cancel some amount of federally held debt.

8. We’re Even Thankful for Recent Flood Guidance.

In June, nine long years after the last interagency Q&As, the OCC, FDIC, NUCA, Fed, and FCA released proposed Flood Q&As. Thankfully, the agencies put in extra work in the kitchen overhauling the organization of the Q&As into subject matter categories and also added new questions and answers addressing force placement of flood insurance, escrow of flood insurance premiums, and the detached structure exemption to the mandatory flood insurance purchase requirement. In November, HUD published a proposed revision to its Single Family Handbook that would allow lenders to accept certain private flood insurance policies on FHA-insured loans. We are always grateful for the opportunity to discuss the Q&As and proposed FHA rule changes with trade groups and flood insurance stakeholders across the industry in 2021, and we promise not to drone on like that one peculiar uncle.

9. The Consumer Lending Industry Is Very Thankful for Needed Regulatory Guidance in 2020.

This year the small dollar and unsecured consumer lending industry, including both banks and non-depository banks, saw some much-needed guidance from federal regulators. In a joint statement issued by the OCC, CFPB, Federal Reserve, FDIC, and NCUA, the federal financial institution regulatory agencies published a joint statement on March 26, 2020, “to specifically encourage financial institutions to offer responsible small-dollar loans to both consumers and small businesses.” The CFPB also issued guidance on COVID-19-related issues and compliance obligations for financial institutions, issued two sets of FAQs to address the new proposed Payday Lending Rule and rescinded part of the proposed rule, offered a common-sense approach to the definition of “abusive” under UDAAP, and issued several No Action Letters signaling a solid attempt at working with the industry on innovative ideas. The OCC, with the help of acting Comptroller of the Currency Brian Brooks, has been phenomenal in its forward thinking attempt to bring the traditional banking industry into the modern day fintech era by defining key terms that have tied many banking institutions and related partners up in unnecessary litigation, including True Lender and Valid When Made (aka the Madden Fix). Most recently, the OCC last week proposed a rule to ensure fair access to banking services provided by banks providing some much-needed relief from the prior administration’s Operation Chokepoint. Clear regulatory guidance helps our clients and the industry avoid pitfalls and establish solid compliance programs, a win-win for both sides. Overall there is much to be thankful for!

10. We Are Thankful for You!

Of all the things we are grateful for this year, we are especially thankful for you – our friends and clients. While we’ve missed seeing and connecting with you in person over the last several months, we look forward to more joyful days ahead. From the Bradley family to yours, we wish you a safe and healthy holiday season!

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Photo of Christy W. Hancock Christy W. Hancock

Christy Hancock’s practice is dedicated to financial services regulatory compliance and litigation. Her work with mortgage servicing and financial institution clients has given her a broad base of knowledge regarding laws affecting the mortgage servicing business, including bankruptcy and foreclosure best practices, payment…

Christy Hancock’s practice is dedicated to financial services regulatory compliance and litigation. Her work with mortgage servicing and financial institution clients has given her a broad base of knowledge regarding laws affecting the mortgage servicing business, including bankruptcy and foreclosure best practices, payment application, correspondence requirements, allowable fees, loan modifications, escrow requirements, and property preservation. In recent years, the majority of her practice has focused on advising large financial institutions on bankruptcy-related regulatory matters and large-scale remediation projects.

Photo of Hallman B. Eady Hallman B. Eady

Hall Eady is a commercial and financial services litigator. For financial services companies, his practice includes defending against borrower and customer-driven claims, and providing advice regarding recoupment options, including lien rights, closing errors, title insurance, mortgage insurance and correspondent/broker agreements. For commercial clients…

Hall Eady is a commercial and financial services litigator. For financial services companies, his practice includes defending against borrower and customer-driven claims, and providing advice regarding recoupment options, including lien rights, closing errors, title insurance, mortgage insurance and correspondent/broker agreements. For commercial clients, his practice includes representing businesses in contract negotiations, general commercial and contract disputes, insurance claims, business owner disputes, real property disputes and claims against professional service providers including insurance brokers. Hall has also represented a number of construction companies in contract negotiations and against large claims of defective construction.

Photo of Heather Howell Wright Heather Howell Wright

Heather Wright helps financial institutions identify operational risks and determine business solutions to mitigate those risks. She provides regulatory and compliance advice and manages litigation for financial institutions regarding compliance with, and alleged violations of, security agreements and other contracts as well as…

Heather Wright helps financial institutions identify operational risks and determine business solutions to mitigate those risks. She provides regulatory and compliance advice and manages litigation for financial institutions regarding compliance with, and alleged violations of, security agreements and other contracts as well as lending and consumer finance statutes and regulations — particularly in matters involving property insurance and flood insurance.

Photo of Christopher K. Friedman Christopher K. Friedman

Chris Friedman is a regulatory compliance attorney and litigator who focuses on helping consumer finance companies and small business lenders, as well as banks, fintech companies, and other participants in the financial services industry, address the challenges of operating in a highly regulated…

Chris Friedman is a regulatory compliance attorney and litigator who focuses on helping consumer finance companies and small business lenders, as well as banks, fintech companies, and other participants in the financial services industry, address the challenges of operating in a highly regulated sector. Chris focuses on both small business lenders and alternative business finance products and has helped non-bank small business lenders, banks who make small business loans, commercial credit counselors, lead generators, and others in the industry. He helps clients launch new products, conduct due diligence, engage in compliance reviews, evaluate litigation risk, and solve some of the unique legal problems faced by companies who work with small businesses. In that vein, Chris has written extensively about the upcoming rulemaking related to Dodd-Frank 1071, which will require data collection and reporting by companies making loans to certain small businesses.

Photo of Leah M. Campbell Leah M. Campbell

Leah Campbell is a senior attorney in the Banking and Financial Services Practice Group. Leah has significant experience representing financial services and insurance company clients in both federal and state courts, as well as before state regulators. She has advised national mortgage servicers…

Leah Campbell is a senior attorney in the Banking and Financial Services Practice Group. Leah has significant experience representing financial services and insurance company clients in both federal and state courts, as well as before state regulators. She has advised national mortgage servicers on FDCPA claims, loan finance companies on UDAAP claims, and banks on OFAC- related issues.

In addition, Leah has provided intellectual property guidance in M&A and corporate structuring matters and advised on GDPR implementation and cross-border encryption issues.

Photo of Jennifer L. Galloway Jennifer L. Galloway

Jennifer Galloway’s practice is dedicated to helping financial services clients successfully navigate increasingly complex regulatory and business environments. She is co-chair of Bradley’s Small Dollar and Unsecured Consumer Lending team and focuses on consumer financial services laws and regulations affecting banks, non-depository banks…

Jennifer Galloway’s practice is dedicated to helping financial services clients successfully navigate increasingly complex regulatory and business environments. She is co-chair of Bradley’s Small Dollar and Unsecured Consumer Lending team and focuses on consumer financial services laws and regulations affecting banks, non-depository banks and other financial institutions. Jennifer provides skilled regulatory guidance and detailed knowledge of the laws impacting both traditional and innovative lenders in the consumer financial services market, with considerable experience in online consumer lending. Her compliance work includes assisting clients with developing, implementing and maintaining compliance management systems, performing internal compliance audits for clients, preparing clients for outside audits, as well as preparing related lending documents and disclosures. She also counsels financial services companies regarding CFPB preparedness, implementation and operational strategies for complying with the CFPB’s regulations, and assists in defending regulatory enforcement actions.