New York Flexes its Regulatory Muscle

August 2, 2019 at 9:18 am Leave a comment

Hardly a day goes by lately without New York flexing its regulatory muscle. Yesterday, the Department of Financial Services and the Attorney General sued Vision Property Management for alleged violations of federal lending laws, illegally evading state licensing requirements, and engaging in unfair and deceptive practices. The actions of the Attorney General and Superintendent Lacewell are noteworthy; not because credit unions engage in the despicable conduct outlined in the complaint (they don’t), but because it underscores the aggressive posture New York is taking to fill in perceived gaps in federal enforcement of consumer lending laws.

According to the complaint, Vision Property Management has bought distressed properties and then leased them to home buyers for more than a decade. The complaint alleges that the company uses a lease-to-own framework under which it deceives consumers into thinking that they are buying a house, in fact they are entering into high interest lease and can be quickly evicted without the protection afforded by New York’s foreclosure laws. The South Carolina Company also never got licensed to provide mortgages in New York State. This is one of the highest profile licensing actions I have seen the state take against financial institutions.

 Loan Servicer Regulations Release

The Department of Financial Services also published proposed regulations in the state register detailing the obligations of student loan services. Credit unions are exempt from the state’s new licensing requirements for student loan servicing, but should make themselves familiar with these requirements. On that note enjoy your weekend.

 

 

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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