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This topic consolidates legislative summaries of new and revised state laws pertaining to licensing, originating, and servicing mortgage loans. 

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June 27, 2018

Washington State Adopts Provisions Regarding Notaries

Bankers Advisory--Rhona Kyeyune

The Washington Department of Licensing (the “Department”) adopted provisions relating to notaries that include replacing all existing sections as well as adding new sections to Chapter 308-30 of the Washington Administrative Code in order to implement the provisions of the Revised Uniform Law on Notarial Acts. These provisions are effective on July 1, 2018.

Application process for notary public commission

Under the amendment a notary public appointment will now be called a “notary public commission” and, in order to apply for a notary public commission, an applicant must submit an application on forms provided by the Department.

The application must include evidence of a ten thousand dollar surety bond signed by the notary public, payment of the prescribed fee; and a signed and notarized oath of office.

The applicant must provide both his or her legal name and his or her commission name as part of a notary public commission. The applicant’s commission name must contain his or her surname, and initials of the applicant’s first and middle name.

An applicant applying for an electronic records notary public endorsement must submit an electronic records notary public application on forms provided by the Department and pay the prescribed fee.

The amendment also provides that “an applicant may only apply for an electronic records notary public endorsement if they currently hold an active notary public commission; or they are applying for a notary public commission and an electronic records notary public endorsement simultaneously.”

The Department must be notified within thirty days of application of the tamper-evident technology provider that an individual applying for an electronic records notary public endorsement has enrolled with before they perform his or her first electronic notarial act.

The amendment lays down the requirements for technologies and technology providers and defines “Tamper-evident technology” as “a set of applications programs, hardware, software, or other technologies designed to enable a notary public to perform electronic notarial acts and to display evidence of any changes made to an electronic record” and a “Technology provider” as “an individual or entity that offers the services of a tamper-evident technology for electronic notarial acts.”

A notary public must reapply with the Department for each commission term before performing notarial acts. He or she may elect not to apply for an electronic records notary public endorsement. The notary public must report any changes to information submitted on a notary public’s commission or endorsement applications to the Department in writing within fifteen days.

Approval or denial of application

The Department must approve the application and issue the commission or endorsement upon the applicant’s fulfillment of the requirements for a notary public commission or an electronic records notary public endorsement.

If the application is incomplete or invalid, it shall be held by the Department for thirty calendar days to allow the applicant to cure any defects. When the thirty day period, elapses the application shall be canceled and any application fees forfeited.

An applicant or notary public may not perform any notarial acts or any electronic notarial acts before receiving a notary public commission or an electronic records notary public endorsement from the Department.

Term of a commission

The amendment provides that “a notary public commission shall expire on the expiration date of the notary public’s surety bond, no more than four years after his or her commission date. An electronic records notary public endorsement is valid from the date the endorsement is issued by the Department, and continues as long as the notary public’s current commission.”

Application fees

The amendment lays down the following fees which should be charged by the Department:

  • Application for notary public commission – $30.00

 

  • Application for electronic records notary public endorsement -$15.00
  • Renewal of notary public commission -$30.00
  • Renewal of electronic records notary public endorsement – $15.00
  • Duplicate certificate of commission (including name change) -$15.00

Acquiring official seal or stamp

The amendment lays down the requirements for the size and form of the official seal and stamp and provides that an official seal or stamp shall only be procured by a notary public after receiving a certificate evidencing the notary public’s commission from the Department and after a copy of the certificate is provided to the notary public’s chosen seal or stamp vendor.

The amendment further provides that “a notary public with a commission in effect on July 1, 2018, may continue to use his or her notarial seal until the commission’s date of expiration. A notary public who procures an official seal or stamp after July 1, 2018, is subject to and shall comply with the rules in WAC 308-30-070.”

“The stamp a notary public acquires is the exclusive property of the notary public, and shall not be surrendered to an employer upon termination of employment, regardless of whether the employer paid for the seal or for the notary’s bond or appointment fees.”

Replacement of lost or stolen official seal or stamp

The Department must be notified by the notary public in writing within ten business days of discovering the seal or stamp was lost or stolen. A replacement official seal or stamp may not be obtained until the notary public notifies the Department that the original was lost or stolen.

Furthermore, the amendment provides that “a replacement official seal or stamp must contain some variance from the original seal or stamp. If the lost or stolen official seal or stamp is found or recovered after a replacement has been obtained, the original seal or stamp shall be destroyed.”

Notary signature.

The exact name that appears on the notary’s certificate of commission and his or her seal or stamp must be used by a notary public signing a notarial certificate of a completed notarial act.

Requirements for notarial acts

“The notary public must be physically within the geographic boarders of the state of Washington when performing a notarial act. A notarial officer who certifies that an event has occurred or an act has been performed shall determine, from personal knowledge or satisfactory evidence, that the occurrence or performance took place.”

Authorized electronic notarial acts.

A notary public who has received an electronic records notary public endorsement from the Department may take an acknowledgment; a verification on oath; witness or attest a signature; certify or attest a copy; certify that an event has occurred or that an act has been performed. The notary public may also note a protest of a negotiable instrument only if the notary public is a licensed to practice law in the State of Washington or acting under the authority of an attorney who is licensed to practice law in State of Washington or another state; or if acting under the authority of a financial institution regulated by State of Washington, another state, or the federal government.

Completion of electronic notarial certificate

A notary public must complete an electronic notarial certificate for every electronic notarial act. The electronic notarial certificate must be completed at the time of notarization and in the physical presence of the principal.

Certification of electronic notarial acts

Each electronic notarial certificate shall be signed with an electronic signature and authenticated with an official stamp by a notary public. A “Principal” is defined as “an individual whose electronic signature is notarized; or an individual, other than a witness required for an electronic notarial act, taking an oath or affirmation from the notary public.”

Electronic notarial signature

A tamper-evident technology must be used by the notary public to produce the notary’s electronic signature in a manner that is capable of independent verification. Reasonable steps must be taken by the notary public to ensure that no other individual may possess or access a tamper-evident technology used to produce the notary’s electronic signature. The tamper-evident technology whose exclusive purpose is to perform electronic notarial acts must be kept in in the sole control of the notary.

Electronic Notarial stamp

An electronic stamp may be used to authenticate an electronic notarial. The electronic stamp of a notary public shall be a digital image that appears in the likeness or representation of a traditional physical notary public official stamp.

The tamper-evident technology used to create a notary public’s electronic stamp shall not be used for any purpose other than performing electronic notarial acts and only the notary public to whom the tamper-evident technology is registered shall generate an official stamp.

Journal of notarial acts

The amendment requires the notary public to keep a journal describing each notarial act performed. The amendment under a new section also provides for the format of the journals of the notarial acts and the disposition of the journal

Fees for Notarial acts

The amendment lays down the following fees which should be charged for notarial acts:

  • Witnessing or attesting a signature – $10.00
  • Taking an acknowledgment or a verification upon oath or affirmation – $10.00
  • Certifying or attesting a copy – $10.00
  • Administering an oath or affirmation – $10.00
  • Certifying that an event has occurred or an act has been performed – $10.00

The amendment further provides that a notary public need not charge for notarial acts, may charge fees for receiving or noting a protest of a negotiable instrument, may additionally charge the actual costs of copying any instrument or record, and may charge a travel fee when traveling to perform a notarial act.

Testimonials.

The amendment provides that “a notary may not endorse or promote any service, contest, or other offering if the notary’s seal or title is used in the endorsement or promotional statement.”

Forms

The amendment also stipulates that “the forms in RCW 42.45.140 are examples of certificates with the sufficient information included. When a specific form is required by another statute of this state, the required form shall be used. A non-attorney notary may not assist another person in drafting, completing, selecting, or understanding a document or transaction requiring a notarial act.”

Change of name or address.

“A notary public must notify the Department of his or her name change or address. The name change notification must be accompanied by a bond rider from the bonding company amending the notary bond, and the prescribed fee for a name change which provides a duplicate notary certificate showing the new name. A notary that submits a name change notification shall continue to use his or her original notary stamp or seal and his or her original name and signature until they receive a new commission certificate and seal or stamp with the new information.”

Termination or suspension of commission or endorsement.

The amendment provides for termination or suspension of commission or endorsement by the Department. “A notary public may also terminate his or her notary public commission and/or electronic records endorsement by notifying the Department of this intent and disposing of all or any part of a tamper-evident technology in the notary’s control whose purpose was to perform electronic notarizations. A notary public whose commission is terminated or expired, either by the notary or the Department, shall disable his or her official stamp by destroying, defacing, damaging, or securing the device against use.”

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June 25, 2018

Pennsylvania Enacts Fast-Track Foreclosure Process for Vacant Properties

Hill Wallack LLP--Michael J. Shavel, Esq and Jill M. Fein, Esq

New legislation in Pennsylvania provides for an accelerated foreclosure for vacant properties. The Vacant and Abandoned Real Estate Foreclosure Act (the “Act”) which goes into effect on December 19, 2018 enables creditors to expedite the foreclosure process and sheriff’s sale if the property is certified as vacant.

The Act is meant to assist municipalities which are faced with rapidly deteriorating properties that create a health and safety issue in the community. These properties are typically not repaired or restored until a creditor acquires title; therefore the expedited process allows foreclosing creditors to reach the point of sheriff’s sale quicker than the normal track.

Under the Act, once a foreclosure lawsuit is commenced the creditor can choose one of two methods to certify that a property is vacant either through a municipal code officer or through the court system. If the creditor chooses to use a municipal code officer, the officer will inspect the mortgaged property and draft a report certifying that the property is vacant and abandoned. The creditor is responsible for compensating the code officer for the work performed. The report must then be sent to the owner of the property and/or the obligor under the mortgage with a notice that the owner must request a hearing to refute the vacancy determination, and if they fail to do the finding will become final.

A creditor may also use the judicial method to certify that a property is vacant by requiring the owner to evidence to the Court that the property is not abandoned. The judicial method requires that the creditor file an affidavit which can be provided by a code enforcement officer, the creditor or any competent adult with knowledge of the condition of the property (including a property inspector or agent) with photographs showing the condition of the property to evidence the alleged abandonment of the property. This Affidavit and a Rule to Show Cause is then served on the property owner or obligor, who then must respond with a statement under oath certifying that the property is not vacant and abandoned. In the event a property owner or obligor responds, a hearing will be set and a judge will make the final determination.

Once the property is certified as vacant and abandoned, the foreclosure process becomes streamlined and the typical obstacles that a creditor may encounter in moving to a sheriff’s sale are eliminated. The property is not subject to mediation, conciliation, diversion, or any other local program to encourage resolution of owner-occupied residential foreclosures. Eliminating the need for service by the Sheriff all subsequent documents may be served by first class mail to an address specified by the owner, or if no address is specified by first class mail and posting on the property. Most notably, once the property is certified as vacant the sheriff must schedule the property for a sheriff’s sale within 60 days of the filing of the writ of execution and the creditor’s payment of the acceleration fee. Finally, the Act also allows a creditor to exercise a limited right to possession while the foreclosure is pending to maintain the yard and exterior of the property and to remedy any potential health or safety hazards.

The Act provides a welcome relief for creditors navigating the foreclosure process in vacant properties and all but eliminates the delays that can delay a residential foreclosure for months or years. Creditors should start planning to take advantage of this new expedited track now for properties known to be vacant.

©2018 Hill Wallack LLP. All rights reserved. Please contact Hill Wallack for permission to reprint. Notice: The purpose of this Client Alert is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, accuracy and completeness of which cannot be assured. This Client Alert should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.

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June 25, 2018

North Carolina Amends Provisions Regarding Notice of Foreclosure Sale Cancellations

North Carolina Senate Bill 168 makes various changes to the law governing the Administration of Justice, including Part XI. Notice of Foreclosure Sale Cancellations.  

  • Must deliver a written notice of cancellation of the sale to the Clerk of Superior Court, including the information required.  
  • In the event the notice of cancellation is not received by the Clerk prior to the scheduled time of the sale, the person excising the power of sale, or his or her agent or attorney, must publicly announce the cancellation of the sale, attach to or enter on the original notice of sale posted at the courthouse door, a notice of cancellation, give written or oral notice of cancellation to each party entitled to receive the notice of sale, and hand-deliver written notice of cancellation to the Clerk's office.
  • If a scheduled sale has been withdrawn, the notice of cancellation shall remain in the location at the county courthouse for no less than 30 days. If the sale has been postponed, that notice shall remain in that location until it is replaced by a notice of a rescheduled sale or of a withdrawn sale.

 This section becomes effective July 1, 2018, and applies to foreclosure sales noticed on or after that date.

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June 22, 2018

Michigan Modifies Provisions Regarding Property Recording

Michigan Senate Bills 737 prescribes certain conditions relative to the execution of instruments entitled to be recorded in the office of the register of deeds.  Instruments presented for recording must comply with each of the following requirements:

(a) The name of each person purporting to execute the instrument is legibly printed, typewritten, or stamped beneath the original signature or mark of the person, and the signature or mark is in black or dark blue ink.

(b) A discrepancy does not exist between the name of each person as printed, typewritten, or stamped beneath his or her signature and the name as recited in the acknowledgment or jurat on the instrument.

(c) The name of any notary public whose signature appears on the instrument is legibly printed, typewritten, or stamped on the instrument and appears on the same page near the signature of the notary public.

(d) The address of each of the grantees in each deed of conveyance or assignment of real estate, including the street number address if located within territory where street number addresses are in common use, or, if not, the post office address, is legibly printed, typewritten, or stamped on the instrument.

(e) If the instrument is executed before April 1, 1997, each sheet of the instrument is all of the following:

(i) Typewritten or printed in type not smaller than 8-point size.

(ii) Not more than 8-1/2 by 14 inches.

(iii) Legible.

(iv) On paper of not less than 13 (17x22—500) pound weight.

(f) If the instrument is executed after April 1, 1997, each sheet of the instrument complies with all of the following requirements:

(i) Has a margin of unprinted space that is at least 2-1/2 inches at the top of the first page and at least 1/2 inch on all remaining sides of each page.

(ii) Subject to subsection (3), displays on the first line of print on the first page of the instrument a single statement identifying the recordable event that the instrument evidences.

(iii) Is electronically, mechanically, or hand printed in 10-point type or the equivalent of 10-point type.

(iv) Is legibly printed in black ink on white paper that is not less than 20-pound weight.

(v) Is not less than 8-1/2 inches wide and 11 inches long or more than 8-1/2 inches wide and 14 inches long.

(vi) Contains no attachment that is less than 8-1/2 inches wide and 11 inches long or more than 8-1/2 inches wide and 14 inches long.

(g) Unless state or federal law, rule, regulation, or court order or rule requires that all or more than 4 sequential digits of the social security number appear in the instrument, beginning on 1 of the following dates the first 5 digits of any social security number appearing in or on the instrument are obscured or removed:

(i) Except as provided in subparagraph (ii), September 12, 2007.

(ii) For an instrument presented to the register of deeds by the department of treasury, April 1, 2008.

(h) If the instrument or any part of it is in a language other than English, a written English translation is attached to the instrument.

(i) If the instrument is executed after January 1, 1964, the instrument contains the name and business address of the person who drafted the instrument.

(2) Subsection (1)(e) and (f) does not apply to instruments executed outside this state or to the filing or recording of a plat or other instrument, the size of which is regulated by law.

(3) A register of deeds shall not record an instrument executed after April 1, 1997, other than an instrument described in subsection (2), if the statement required under subsection (1)(f)(ii) purports to evidence more than 1 recordable event.

(4) Any instrument received and recorded by a register of deeds, including any instrument considered duly recorded under subsection (6), is conclusively presumed to comply with this act. The requirements contained in this act are cumulative to the requirements imposed by any other act relating to the recording of instruments.

(5) A register of deeds shall not reject an instrument for recording because of the content of the instrument if the instrument complies with the provisions of this act and any other act relating to the recording of instruments.

(6) If a mortgage meets all requirements for recording under this act and a copy of the mortgage is affixed to an affidavit that is recordable under section 1a(g) of 1915 PA 123, MCL 565.451a, the register of deeds shall receive the affidavit with the accompanying copy of the mortgage for record, and the mortgage is duly recorded under this act and under section 29 of 1846 RS 65, MCL 565.29, as of the date of recording of the affidavit. To the extent that the mortgage validly creates a lien, the lien is perfected as of the date of recording of the affidavit. The amendments to this section enacted by 2014 PA 347 apply retroactively to all copies of mortgages verified by affidavit regardless of whether they are recorded on, before, or after October 17, 2014, the effective date of 2014 PA 347. However, a register of deeds shall not receive an affidavit and mortgage for record under this subsection after October 16, 2014 if more than 1 mortgage is attached to the affidavit.

Enacting section 1. Section 1a of 1937 PA 103, MCL 565.201a, is repealed.

Enacting section 2. This amendatory act takes effect 90 days after the date it is enacted into law.

This act is ordered to take immediate effect.

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June 22, 2018

Michigan Modifies Provisions Regarding Property Recording

Michigan Senate Bills 737 prescribes certain conditions relative to the execution of instruments entitled to be recorded in the office of the register of deeds.  Instruments presented for recording must comply with each of the following requirements:

(a) The name of each person purporting to execute the instrument is legibly printed, typewritten, or stamped beneath the original signature or mark of the person, and the signature or mark is in black or dark blue ink.

(b) A discrepancy does not exist between the name of each person as printed, typewritten, or stamped beneath his or her signature and the name as recited in the acknowledgment or jurat on the instrument.

(c) The name of any notary public whose signature appears on the instrument is legibly printed, typewritten, or stamped on the instrument and appears on the same page near the signature of the notary public.

(d) The address of each of the grantees in each deed of conveyance or assignment of real estate, including the street number address if located within territory where street number addresses are in common use, or, if not, the post office address, is legibly printed, typewritten, or stamped on the instrument.

(e) If the instrument is executed before April 1, 1997, each sheet of the instrument is all of the following:

(i) Typewritten or printed in type not smaller than 8-point size.

(ii) Not more than 8-1/2 by 14 inches.

(iii) Legible.

(iv) On paper of not less than 13 (17x22—500) pound weight.

(f) If the instrument is executed after April 1, 1997, each sheet of the instrument complies with all of the following requirements:

(i) Has a margin of unprinted space that is at least 2-1/2 inches at the top of the first page and at least 1/2 inch on all remaining sides of each page.

(ii) Subject to subsection (3), displays on the first line of print on the first page of the instrument a single statement identifying the recordable event that the instrument evidences.

(iii) Is electronically, mechanically, or hand printed in 10-point type or the equivalent of 10-point type.

(iv) Is legibly printed in black ink on white paper that is not less than 20-pound weight.

(v) Is not less than 8-1/2 inches wide and 11 inches long or more than 8-1/2 inches wide and 14 inches long.

(vi) Contains no attachment that is less than 8-1/2 inches wide and 11 inches long or more than 8-1/2 inches wide and 14 inches long.

(g) Unless state or federal law, rule, regulation, or court order or rule requires that all or more than 4 sequential digits of the social security number appear in the instrument, beginning on 1 of the following dates the first 5 digits of any social security number appearing in or on the instrument are obscured or removed:

(i) Except as provided in subparagraph (ii), September 12, 2007.

(ii) For an instrument presented to the register of deeds by the department of treasury, April 1, 2008.

(h) If the instrument or any part of it is in a language other than English, a written English translation is attached to the instrument.

(i) If the instrument is executed after January 1, 1964, the instrument contains the name and business address of the person who drafted the instrument.

(2) Subsection (1)(e) and (f) does not apply to instruments executed outside this state or to the filing or recording of a plat or other instrument, the size of which is regulated by law.

(3) A register of deeds shall not record an instrument executed after April 1, 1997, other than an instrument described in subsection (2), if the statement required under subsection (1)(f)(ii) purports to evidence more than 1 recordable event.

(4) Any instrument received and recorded by a register of deeds, including any instrument considered duly recorded under subsection (6), is conclusively presumed to comply with this act. The requirements contained in this act are cumulative to the requirements imposed by any other act relating to the recording of instruments.

(5) A register of deeds shall not reject an instrument for recording because of the content of the instrument if the instrument complies with the provisions of this act and any other act relating to the recording of instruments.

(6) If a mortgage meets all requirements for recording under this act and a copy of the mortgage is affixed to an affidavit that is recordable under section 1a(g) of 1915 PA 123, MCL 565.451a, the register of deeds shall receive the affidavit with the accompanying copy of the mortgage for record, and the mortgage is duly recorded under this act and under section 29 of 1846 RS 65, MCL 565.29, as of the date of recording of the affidavit. To the extent that the mortgage validly creates a lien, the lien is perfected as of the date of recording of the affidavit. The amendments to this section enacted by 2014 PA 347 apply retroactively to all copies of mortgages verified by affidavit regardless of whether they are recorded on, before, or after October 17, 2014, the effective date of 2014 PA 347. However, a register of deeds shall not receive an affidavit and mortgage for record under this subsection after October 16, 2014 if more than 1 mortgage is attached to the affidavit.

Enacting section 1. Section 1a of 1937 PA 103, MCL 565.201a, is repealed.

Enacting section 2. This amendatory act takes effect 90 days after the date it is enacted into law.

This act is ordered to take immediate effect.

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June 18, 2018

New Hampshire Modifies Banking, Consumer Credit, and Licensing Provisions

Bankers Advisory--Elizabeth Dailey

Banking and Consumer Credit Provisions

New Hampshire has amended provisions regarding the applicability of various banking and consumer credit laws. These changes are effective as of August 7, 2018.

Advertising Motor Vehicles

Provisions regarding the advertisement of motor vehicles have been amended. Under these new provisions, the banking department may review advertisements of motor vehicles within three years of the date the advertisement is advertised. The previous prevision did not place any time constraints on the banking department’s right to review advertisements.

Payment Books

The provisions regarding payday loans and payment books has also been modified. Under the new provisions, the previously enforced requirement that a payment book provided to a borrower contain an interest calculation has been eliminated.

For the full text of House Bill 1687, please refer to https://legiscan.com/NH/text/HB1687/id/1790628/New_Hampshire-2018-HB1687-Enrolled.html.

Licensing Provisions 

New Hampshire has amended its provisions regarding licensing provisions. These changes are effective as of August 7, 2018.

Under this bill, certain individuals who are not regularly engaged in business as mortgage bankers, mortgage brokers, mortgage servicers, and mortgage originators in a commercial context are exempt from regulation. There is now a rebuttable presumption that an individual is not engaged in the business of a mortgage banker, broker, servicer, or originator if he or she is involved in three or fewer loans in a consecutive 12-month period.

For the full text of Senate Bill 314, please refer to http://gencourt.state.nh.us/bill_status/billText.aspx?id=1823&txtFormat=html&sy=2018.

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June 14, 2018

Tennessee Adopts Provisions Setting Forth New Standards of Practice for Debt Collectors

Banking Advisory--Adam Faria

The Tennessee Department of Commerce and Insurance, Division of Regulatory Boards, Collection Service Board has adopted provisions regarding the standards of practice for debt collectors. The new provisions address, among other things, the acquisition of location information from 3rd parties, communications in connection with debt collection, harassment or abuse, and unfair practices.

The standards define a debt collector as a person acting on behalf of a collection service licensed or required to be licensed by the Tennessee Collection Services Board. In the event a debt collector seeks to acquire location information about a consumer from a 3rdparty, the debt collector must identify himself or herself and state that he/she is attempting to confirm or correct location information, and may only identify his/her employer if expressly requested. The debt collector cannot state that the consumer owes a debt, may not communicate with the 3rd party more than once unless requested to do so, may not communicate by post card, may not use any language or symbol on an envelope that indicates the debt collector is in the debt collection business, and, should the debt collector become aware that the consumer is represented by an attorney, may not communicate with any person other than that attorney.

When communicating with the consumer, the debt collector may not communicate at any unusual time or place that is known to be inconvenient to the consumer. The standards provide that it may be assumed that communication at the consumer’s location after 8:00am and before 9:00 pm local time is a convenient time. The debt collector, if he or she knows the consumer is represented by an attorney, may only communicate with that attorney unless the attorney consents to direct communication with the consumer. Further, a debt collector may not communicate with the consumer at his or her place of employment if the debt collector has reason to know that the employer prohibits the consumer from receiving such communication. If a consumer notifies the debt collector in writing that he or she wishes to cease communication, then the debt collector must cease all communication except to advise the consumer that the collector is terminating further efforts to collect the debt, notify the consumer that the collector may invoke specific remedies which are undertaken in the ordinary course of business, or to notify the consumer that the collector intends pursue a specific remedy.

The standards also prohibit harassing and abusive behavior. A debt collector may not use violence or criminal means to harm the consumer or his or her reputation or property; may not use obscene or profane language; may not publish a list of consumers who refuse to pay the debt; and may not repeatedly or continuously telephone a consumer with the intent to annoy, abuse, or harass any person.

A debt collector may not engage in unfair debt collection practices. Such practices include the collection of any amount that is not expressly authorized by the agreement creating the debt or other amounts that are prohibited by law. The debt collector may not accept, solicit, or deposit a postdated check with the intent of depositing the check prior to such date, or for the purpose of threatening criminal prosecution. Further, the debt collector may not take or threaten to take any non-judicial action the purpose of which is to dispossess the consumer of property if there is no right to possession through an enforceable security interest, there is no present intent to take possession of the property, or the property is exempt from dispossession by law.

These standards take immediate effect and the full text may be found at: https://publications.tnsosfiles.com/rules/0320/0320-05.20180605.pdf

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June 12, 2018

South Carolina Adopts Provisions Regarding Department of Consumer Affairs, and Telephone Privacy Protection Act

Residential Mortgage | Compliance Monitor

The state of South Carolina has recently adopts provisions regarding the state’s Department of Consumer Affairs, and its Telephone Privacy Protection Act. Both updates are effective immediately.

South Carolina Enacts Provisions Regarding Telephone Privacy Protection Act

The State of South Carolina has recently enacted House Bill 4628 regarding the state’s Telephone Privacy Protection Act (“SCTPPA”), effective immediately.

SCTPPA applies to “telephone solicitations,” defined as the “initiation of a telephone call, or a text or media message sent, to a natural person’s residence in South Carolina, or to a wireless telephone with a South Carolina area code, for the purpose of offering or advertising a property, good, or service for sale, lease, license, or investment, including offering or advertising an extension of credit, prize promotion, or for the purposes of obtaining information that will or may be used for the direct solicitation thereof.” The bill then lays out a list of restrictions that apply to solicitors.

First, a telephone solicitor may not initiate, or cause to be initiated, a telephone solicitation at any time other than between 8:00 a.m. and 9:00 p.m. local time at the consumer’s location, unless the telephone solicitor has obtained the prior written consent of the consumer.

Next, at the outset of a telephone solicitation, a telephone solicitor must provide a first and last name to identify him or herself and provide the name of the person on whose behalf the telephone solicitation is being made. The solicitor must then promptly disclose to the consumer the following information: (1) a telephone number and address at which the telephone solicitor may be contacted; (2) the purpose of the telephone solicitation; (3) that no purchase or payment is necessary to be able to win a prize or participate in a prize promotion if a prize promotion is offered; and (4) the option to be added to the telephone solicitor’s in-house ‘do not call’ list.

SCTPPA then prohibits solicitors from initiating a call or text message or engaging in conduct that results in the display of misleading, false or inaccurate caller identification information on the receiving party’s telephone. This bans any method of circumventing caller identification technology that allows the receiving party to identify from what phone number, location, or organization the call or text message has originated from.  Solicitors also may not misrepresent the origin and nature of the call or text message.

In situations where a live telephone solicitor is not available to speak with the consumer answering a telephone solicitation call within two seconds of the completed greeting, the telephone solicitor must play a prerecorded identification and opt-out message. This message must disclose that the call was for telephone solicitation purposes and must state the name and telephone number of the person on whose behalf the telephone solicitation call is being made, and a telephone number that permits the consumer to make a do-not-call request during regular business hours.

SCTPPA also states that a person may not initiate, or cause to be initiated, a telephone solicitation directed to a telephone number when a person at that telephone number previously stated a desire not to be contacted again by or on behalf of the person on whose behalf the telephone solicitation is being made. This statement may be made to a telephone solicitor or to the person on whose behalf the telephone solicitation is being made if that person is different from the telephone solicitor.  Any request not to receive telephone solicitations must be honored for at least five years from the time the request is made.

Finally, A telephone solicitor may not initiate, or cause to be initiated, a telephone solicitation to a telephone number on the National Do Not Call Registry maintained by the federal government pursuant to the Telemarketing Sales Rule, 16 C.F.R. Part 310, and 47 C.F.R. Section 64.1200.

South Carolina Adopts Provisions Regarding Department of Consumer Affairs

The South Carolina Department of Consumer Affairs adopted miscellaneous provisions under its Consumer Protection Code, which include public complaints and requests for information, delinquent notification filing and fee payment, and filing and posting maximum rate schedules. These provisions are effective immediately.

The updated provisions begin with a description of the South Carolina Department of Consumer Affairs, and an explanation of how the public may access the Department. The Department is divided into six divisions: administration, consumer services, consumer advocacy, public information and education, an identity theft unit, and a legal division.  The provisions then discuss two ways in which the public may access the department of consumer affairs.

First, the public has access to the Department through a complaint procedure which may be accessed through an online complaint system, a statewide toll-free WATS line, or simply by using the regular telephone network of the Department. Telephone numbers for the WATS line and the regular system are published in the news media and other appropriate informational sources at regular intervals. In addition, informal complaints may also be submitted to the Department in writing either utilizing the Department’s regular complaint form or in an appropriate letter or other writing.

Second, the public may make requests for information to the Public Information and Education Division. The types of information that may be requested include any final order, decision, opinion, rule, regulation, written statement of policy or interpretation formulated, adopted or used by the Administrator on the discharge of his functions or any other matter to which the public has access by virtue of the Freedom of Information Act. These items may be inspected at the Office of the Administrator at any reasonable time, during normal office hours.

The provisions then disclose the Department’s penalties with regard to delinquent notification filings and fee payments. Except in the case of willful or repeated violations, notification filings and fees which are not more than 15 days delinquent will be accepted without penalty.  In the case of notification filings and fees that are more than 15 days delinquent, the following penalties apply: 16 to 30 days- 50% of delinquent fee; 31 to 60 days- 100% of delinquent fee; 61 to 90 days- 200% of delinquent fee; 91 days or more- subject to action by the department.

Finally, the provisions discuss the filing and posting of maximum rate schedules. All creditors intending to impose a credit service charge in excess of 18% per annum, and every creditor making supervised loans or restricted loans must (1) file with the Department a rate schedule as shown on the Department’s internet website, and the original of the rate schedule must be filed together with a fee of forty dollars per location, and (2) post in one conspicuous place in every place of business in this state in which the creditor offers to make consumer credit sales, supervised loans, or restricted loans, a maximum rate schedule issued by the Department

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June 11, 2018

Missouri Adopts Digital Assets Provisions

Residential Missouri | Compliance Monitor--Elizabeth Dailey

Missouri has enacted provisions regarding its Fiduciary Access to Digital Assets Act. These provisions are effective as of August 28, 2018.

Health Savings Account

The bill specifies that a health savings account may be created if the trustee of a trust consisting of trust property less than $250,000 concludes that the trust property is insufficient to justify the cost of administration. The trustee must also provide notice to qualified beneficiaries upon this determination. Under the previous provision, the amount of the trust property must have been less than $100,000.

A provision in this section provides that, where a trust or custodial account constitutes a health savings account, a trust may be created by the following methods: 1) a transfer of money to the trustee or custodian, 2) the documentation of the creation of a trust in the trustee or custodian’s records; or 3) the execution of a trust or custodial agreement.

Directed Trust

The term “directed trust” has been defined in the new provision as any trust in which the trust instrument does any of the following: 1) authorizes a trust protector to instruct or direct the trustee, 2) charges a trust protector with responsibilities regarding the trust, 3) grants power over the trust to the trust protector; or 4) grants power over the trust to a person who is not a trustee, settlor, or beneficiary of the trust. The term “trust protector” is further defined within this section.

No-contest Clause

In certain circumstances, a no-contest clause in a trust instrument is unenforceable against an interested person. The bill adds the following circumstances: 1) filing a motion, pleading, or other claim for relief concerning breach of trust by a trustee; and 2) filing a motion, pleading, or other claim for relief concerning removal of a trustee.

Fiduciary Access to Digital Assets Act

The bill establishes the Missouri Fiduciary Access to Digital Assets Act. The Act allows fiduciaries to access electronic records of an account holder. The account holder may allow or prohibit the disclosure or his or her digital assets to a fiduciary in a will, trust, or other record. The account holder also has access to an online tool, which can be used to direct the custodian of the digital assets to disclose some or all of the digital assets. A fiduciary’s access to digital assets can be modified or eliminated by an account holder, federal law, or a term-of-service agreement.

For the full text of House Bill 1250, please refer to https://house.mo.gov/billtracking/bills181/hlrbillspdf/4128H.01I.pdf.

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June 08, 2018

Vermont Modifies Provisions Regarding Consumer Protection, Also Enacts Provisions Regarding Uniform Law on Notarial Acts

Residential Mortgage |Compliance Monitor--Robert Harrison

The state of Vermont modified its provisions relating to data security and consumer privacy through House Bill 764. This bill contains provisions dealing with the protection of personal information and the regulation of data brokers and data collectors.

Title 9 V.S.A. § 2430 is amended with definitions to be used in in chapter 62 governing protections of personal information. A data broker is a business with no direct relationship to the consumer that knowingly collects and sells or licenses personal information of the consumer to a third party (9 V.S.A. § 2430(4)(A)).  Through House Bill 764 Vermont will require data brokers to register with the Secretary of State, pay a $100 annual fee, and disclose information related to their debt collection practices (9 V.S.A. § 2446).  Data brokers have a duty to protect personally identifiable information and must maintain appropriate information security programs and adopt safeguards for the protection of such information (9 V.S.A. § 2447).

The bill also eliminates fees for obtaining a security freeze; Vermont consumers have a right to place a “security freeze” on credit reports pursuant to 9 V.S.A. § 2480h at no charge (9 V.S.A. § 2480h).

The amendments related to data brokers are effective January 1, 2019. The elimination of the fees for obtaining a security freeze is effective upon passage.

The full text of Vermont House Bill 764 can be found here: https://legislature.vermont.gov/assets/Documents/2018/Docs/BILLS/H-0764/H-0764%20As%20Passed%20by%20Both%20House%20and%20Senate%20Official.pdf

 

Notarial Acts

The state of Vermont enacted provisions relating to its Uniform Law on Notarial Acts. These provisions are effective on July 1, 2019.

26 V.S.A. chapter 103 is added to Vermont Law and may be cited as the Uniform Law on Notarial acts (26 V.S.A. § 5301). This act revises Vermont’s notary laws and is based on the Uniform Law Commission’s Revised Uniform Law on Notarial Acts.

Notarial act is defined in this chapter as “an act, whether performed with respect to a tangible or an electronic record, that a notary public may perform under the law of this State. The term includes taking an acknowledgment, administering an oath or affirmation, taking a verification on oath or affirmation, attesting a signature, and noting a protest of a negotiable instrument.” (26 V.S.A. § 5304(7)(A)).

To obtain commission as notary public one must:

“(1) be at least 18 years of age;

(2) be a citizen or permanent legal resident of the United States;

(3) be a resident of or have a place of employment or practice in this State;

(4) not be disqualified to receive a commission under section 5342 of this chapter; and

(5) pass a basic examination approved by the Office based on the statutes, rules, and ethics relevant to notarial acts.” (26 V.S.A. § 5341(b))

Furthermore an applicant must execute and oath of office and submit it to the Office of Professional Regulation within the Office of the Secretary of State and pay a fee of $15 (26 V.S.A. § 5324)

This chapter also provides standards for notarial acts; requires a notarial act to be evidenced by a certificate, and defines notarial unprofessional conduct.

The full text of Vermont House Bill 526 can be found here: https://legislature.vermont.gov/assets/Documents/2018/Docs/BILLS/H-0526/H-0526%20As%20Passed%20by%20Both%20House%20and%20Senate%20Official.pdf

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June 06, 2018

Connecticut Amends Provisions Regarding Security Breaches

Connecticut Senate Bill 472 was passed to (1) prohibit credit rating agencies from charging a fee to consumers to place or remove a security freeze from the consumer's account, (2) require credit rating agencies to notify other credit rating agencies of a consumer's request to place or remove a security freeze from such consumer's account, and (3) increase the amount of identity theft prevention or mitigation services provided after a security breach.

These provisions are effective on October 1, 2018.

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June 04, 2018

Connecticut Modifies Provisions Regarding Foreclosure Mediation Session

To eliminate a requirement that mortgagors represented by counsel appear in person at the first foreclosure mediation session.

These provisions are effective on October 1, 2018.

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June 01, 2018

Vermont, California Charging Ahead of Congress on Data Privacy Laws

Slate--Aaron Mak

Concerns over data privacy have driven much of the conversation around technology in the first half of 2018, with news of the Cambridge Analytica scandal, the European Union’s General Data Protection Regulation (GDPR), and the hack of Securus Technologies’s location-tracking data.

Federal lawmakers have taken notice and say they are considering legislation to better protect citizens’ data. For example, Sens. Amy Klobuchar and John Kennedy introduced the Social Media Privacy Protection and Consumer Rights Act of 2018 in April, while Rep. Marsha Blackburn has renewed her push for the Browser Act that she initially proposed in 2017. Yet it’s unclear when, or if, any of these bills will get a vote. Rather than waiting for Congress, two states are charging ahead with their own data privacy laws.

Last week, Vermont passed the country’s first law regulating data brokers, which are essentially companies that sell people’s information. Data brokers have been known to keep track of marital statuses, browsing histories, online purchases, debts, housing situations, education credentials, and other personal details, which can be useful for digital advertisers attempting to target a certain demographic, or for insurance companies setting rates for customers. By analyzing this data in aggregate, brokers can then make inferences about even more intimate aspects of a person’s life. As TechCrunch points out, it is technically legal for a data broker to speculate on people’s medical conditions based on their purchases at pharmacies. In fact, Facebook just recently decided to discontinue its practice of buying data from such brokers for targeted advertising in the fallout from the Cambridge Analytica scandal.

Vermont’s new law requires data brokers to register with the government, better inform people on what is being collected and how to opt out, ensure that their security practices are up to date, and notify authorities in the case of a breach. Users can now seek legal recourse against such brokers if the data that they sell leads to illegal discrimination, such as an insurance rate being raised due to race. State regulators also have more legal remedies at their disposal and can bring charges against brokers whose data is used for fraud and other crimes.

Consumers on the other side of the country will likely have the opportunity to vote for similar protections in the fall. The California Consumer Privacy Act has received more than 600,000signatures in support, which should earn the initiative a spot on ballots in November. The proposed legislation is broader than Vermont’s, as it would apply to all companies that gather data on people. (The Vermont law applies to any business that gathers the data of people with whom it does not have a direct relationship.)

Much like the GDPR, the California Consumer Privacy Act gives users a host of new rights when it comes to controlling their data. People would have the right to demand that companies disclose what information they collect on them, to prevent that data from being sold, and to sue companies that break the law.

Consumer advocates predict that those standards may end up being adopted throughout the country since so many major tech companies are headquartered in California. Various tech trade groups, along with Google, Comcast, and AT&T, have each contributed hundreds of thousands of dollars to oppose the law.

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May 31, 2018

Louisiana Enacts Provisions Regarding Privileges, Liens and Mortgages

To amend and reenact Code of Civil Procedure Article 2376 and to enact R.S. 13:4368, relative to the cancellation of privileges, liens, and mortgages. 

  • To provide for the cancellation or partial release of inferior privileges, liens, and mortgages on property sold at sheriff's sale; 
  • to provide for the procedures for cancelling or partially releasing inferior privileges, liens, and mortgages; 
  • to provide for the required information for the filing of an affidavit; 
  • to provide the duties, effect, and liability for the filing of an affidavit; 
  • to provide for exceptions; and 
  • to provide for related matters. 

These provisions are effective on August 1, 2018.

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