September 30, 2020
Mortgage forbearance and eviction legislation takes effect in California

Earlier this month, California Governor Gavin Newsom signed AB 3088, The Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020. The California Credit Union League-supported legislation takes effect immediately and permits credit unions to continue to work with members on mortgage forbearances.

According to a summary produced by the League, the bill is comprised of two key components:
  • The COVID-19 Tenant Relief Act of 2020 – enacts protections for small landlords and tenants; and
  • The COVID-19 Small Landlord and Homeowner Relief Act of 2020 – enacts protections for small landlords and impacts mortgages secured by 1-4-unit residential real property (both owner occupied and non-owner-occupied).
CCUL also asserts that the measure temporarily extends the anti-foreclosure provisions of the Homeowner’s Bill of Rights until January 1, 2023 to include any first lien mortgage or deed of trust secured by a 1-4 unit residential real property occupied by a tenant meeting specified conditions (currently owner-occupied).
Civil Immunity Legislation Passes in Idaho

Legislation granting civil immunity from damages or an injury resulting from unknown or unintentional COVID-19 transmissions for individuals, businesses, organizations, and other entities was recently enacted in Idaho. The Coronavirus Limited Liability Act, HB 6, provides a safe harbor for credit unions and was supported by the Northwest Credit Union Association. The measure’s liability protection does not apply to acts or omissions that are intentional, willful, or reckless.

The Act sunsets July 1, 2021.
Pennsylvania Legislation Strengthening the State Bank Agency Advances

Last week, a Pennsylvania bill aimed at ensuring the regulatory assessments paid by state-chartered financial institutions be used to support the operations of the state Department of Banking and Securities (DOBS) advanced to the Senate Banking and Insurance Committee. Senate Bill 1331’s prime sponsor, Sen. Daniel Laughlin (R), cites the past use of assessments to support general government operations and to augment appropriations unrelated to the intended purposes of the assessments as rationale for the legislation.

If enacted, the bill would require the state Banking Trust Fund maintain an adequate operating reserve necessary to ensure DOBS can continue to examine and regulate credit unions and other financial institutions as well as pay its expenses in the event of adverse economic conditions. SB 1331 would also require the consideration of the accreditation requirements of NASCUS and other state regulator organizations in determining the amount to be held in reserve.
Credit Unions Regulatory Burden Eased in South Carolina

As a result of advocacy by the Carolina Credit Union Leagues, the South Carolina Board of Financial Institutions (SCBOFI) recently adopted a policy alleviating delays faced by state-chartered credit unions in paying member dividends. Prior to SCBOFI’s actions, state-chartered credit unions had to await the approval of the South Carolina Commissioner of Banks before making payments from undivided income. In times of negative earnings, credit unions could find themselves requesting approval every month. The new clarification defines divided and undivided earnings and provides for conditional automatic approval of dividend payments from undivided earnings.