May 28, 2020
Consumer protection bill pending in California

Recently, legislation with significant implications to California credit unions advanced in the state legislature. The COVID-19 Homeowner, Tenant and Consumer Relief Law of 2020 ( AB 2501 ) would require credit unions and other financial institutions to halt mortgage and auto loan payments for consumers experiencing financial hardship during the COVID-19 pandemic.

Under the bill’s provisions, consumers experiencing financial hardship during the COVID-19 emergency or 180 days after, can seek mortgage forbearance for up to 180 days, without submitting documentation of the hardship. During the forbearance period, financial institutions would be responsible for any fees and taxes associated with the property, including county taxes and insurance.
AB 2501 also requires financial institutions to pause auto loan payments for borrowers experiencing COVID-19 related hardships for up to 180 days without verification of hardship. Institutions would be barred from charging fees, penalties or additional interest beyond the amounts scheduled during the forbearance.

The California Credit Union League is advocating against the legislation, which is pending in the Assembly Appropriations Committee.
District of Columbia credit union charter now law

As a result of strong advocacy by the MD|DC Credit Union Association (MDCCUA), the Credit Union Act of 2019 officially became law this month. Subject to rulemaking, the Act will provide the D.C. credit union charter as an option to District-based credit unions.

Under the legislation, the DC Department of Insurance, Securities and Banking (DISB) will be authorized to charter, supervise, regulate, examine and exercise other powers related to the operation of credit unions in D.C. Since 1964, the only charter available to credit unions in the District was the federal license to operate issued by NCUA.

Not counting the DISB, there are 45 state governmental agencies that charter, regulate and examine state-chartered credit unions. Only three states — Delaware, South Dakota and Wyoming — have no laws permitting state-chartered credit unions.
Foreclosure moratorium legislation fails in Illinois

The Illinois Credit Union League successfully fended off legislation that would have imposed burdensome requirements on credit unions and other mortgage lenders. HB 5574 included harmful provisions such as the cancelation of debt during a moratorium period and mandatory loss mitigation which could include forgiveness of the forgone payments.

In response to League advocacy, the objectional language was removed from HB 5574 and the measure was ultimately defeated. The legislature did address the issue of foreclosures and evictions by including increased funding for rent and mortgage payment assistance in the state’s budget bill. 
Ohio lawmakers debate COVID-liability protection

Lawmakers in Ohio are debating legislation that would limit the liability of businesses that reopen in the wake of the COVID-19 pandemic. The bill, SB 308 , would provide service providers, including credit unions, with protections from COVID-19 related lawsuits except in instances where the provider's acts are “intentional, willful, or wanton misconduct.”

In testimony in support of SB 308, the Ohio Credit Union League asserts that “costly and frivolous litigation is a serious threat to a provider’s ability to confidently and reliably offer necessary support, services, and products.” The League maintains that the bill would maintain “civil recourse for those impacted by bad actors found in violation of state requirements.”

The legislation is currently pending in the Ohio Senate Judiciary Committee.

StateFocus will be published on a monthly basis during the final week of each month. Please submit any activity in your state to Shelton Roulhac for publication.
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