Posts filed under ‘COVID-19’

What the CDC’s Announcement Means for Your Credit Union

The CDC’s announcement that it was altering its guidance to encourage vaccinated individuals to wear masks indoors in areas with substantial and high transmission rates may very well result in your credit union having to refine its workplace policies and procedures. The Governor issued a statement indicating that the state is reviewing the announcement. In the past the state has used CDC guidance to establish the baseline expectations for businesses in New York. Here is what we know for sure.

The state lifted its mask mandate for fully vaccinated individuals because, as of June 15th, 70% of New Yorkers had received at least one dose of the vaccine. What’s changed? The Delta variant of the virus has proven to be particularly tenacious and evidence is emerging that even fully vaccinated individuals can transmit the disease. Plus there are still a substantial number of individuals reluctant to get vaccinated. As can be seen from this map issued by the CDC, New York State has substantial numbers of new COVID cases.

The surging virus has forced employers to reconsider legal options when it comes to keeping their workplace safe. For example, the Veterans Administration announced that it was mandating that some of its employees get vaccinated and New York City is taking similar steps. The shift to a more aggressive posture reflects the mounting number of administrative rulings and judicial decisions which have reinforced that employers can mandate employee vaccinations provided they are mindful of genuine and sincere religious objections as well as the need for ADA accommodations.

One bellwether case that the legal community is watching is Bridges v. Houston Methodist Hospital, 2021. The case involves a nurse who was fired by the hospital after refusing to get vaccinated. The case is one of the first in which a federal court has directly addressed an argument, popularized on the internet, which contends that since the vaccines were approved on an emergency basis by the Secretary of Health and Human services they can’t be mandated by employers. The plaintiff also contends that the status of the vaccines mandates that employers explain the potential benefits and risks of taking the vaccine.

The district court swiftly rejected this argument. According to the court, federal law permits the Secretary of Health and Human services to authorize the vaccines on an emergency basis. Crucially, according to the court, “it neither expands nor restricts the responsibilities of private employers; in fact, it does not apply at all to private employers like the hospital in this case.”  This case is currently up on appeal before the Fifth Circuit.  If this case doesn’t give employers confidence to mandate vaccinations, the Secretary of Health is expected to approve the vaccine on a non-emergency basis sometime in the fall.

In addition to this case, in May the EEOC issued guidance authorizing employers to mandate vaccinations consistent with Federal Civil Rights Law.

And then of course there is New York State’s Hero Act. At this point the law requires nothing more than for employers to have an infectious airborne disease plan in place by August 5th. The plan only needs to be activated in the event that the Commission of Health issues a declaration that an airborne infectious disease presents a serious risk of harm to the public health. No such announcement has been made but recent events underscore the need to make sure you are ready to comply with NY’s law.

July 28, 2021 at 9:40 am Leave a comment

NCUA to CUs: Don’t Forget About New CFPB Foreclosure Regs

Yours truly is back from a recent visit to God’s country (aka Long Island) and this morning I have credit cards, mortgage regulations and class action lawsuits on my mind.

The NCUA has sent out this letter to credit unions reminding them that new regulations have been issued by the CFPB requiring mortgage servicers to take additional steps to ensure that individuals impacted financially by COVID-19 are vetted for potential loan modifications. These new amendments take effect on August 31st. As I explained in a previous blog, among other things these new regulations apply to homeowners who suffer a financial hardship due, directly or indirectly to the national emergency for the COVID-19 pandemic declared on March 13th 2020.

This announcement got me thinking about one of my favorite topics: The interplay between compliance and litigation, particularly for you bigger guys out there.

NCUA’s announcement is more than just a reminder of what needs to be done on your compliance to-do-list; it is in fact a warning that when you go to foreclose on someone for years to come both borrower attorneys and class action lawyers will be scrutinizing your compliance with these regulations to argue that but for your credit union’s failure to properly comply with these regulations, your member would still own their house.

For example, this morning Law360 reported on how a federal judge in California has increased the number of persons eligible for settlement money from a lawsuit alleging that Wells Fargo failed to properly evaluate borrowers for eligibility in the HAMP program. You may recall that the federal government responded to the mortgage meltdown which started a little over a decade ago by creating the Home Affordable Modification Program (HAMP) under which delinquent borrowers could seek modifications of their mortgage loans. Wells Fargo used a computer program that miscalculated eligibility requirements leading to hundreds of persons either losing their homes or spending more money than they otherwise would have had to. In other words, this is a classic example of how a compliance failure leads to a litigation mess.

Where New Yorkers Stands With Credit Card Debt

Here’s an interesting factoid for you: New Yorkers have among the most sustainable credit card debt in the country with median credit card balances of $1,854 and a median income of $54,588 with which to pay off that debt. These are among the findings of this report issued by WalletHub Today.

See you tomorrow, enjoy your day.

July 27, 2021 at 9:32 am Leave a comment

Why This Week is an Important One For Your Credit Union

This is not your average July week, especially for those credit unions located in the great state of New York.

July 15th is the target date for eligible members to start receiving child tax credits under the American Rescue Plan (ARP). That means that your credit union may already see federal government ACH payments being sent to your member’s accounts. This also means that your credit union has to decide both operationally and on a policy level how it is going to handle these payments.

In March, President Biden signed the American Rescue Plan. The Act increased the child tax credit from $2,000 to 3,000 and raised the age limit from 16 to 17. This year the tax credits will come in the form of advance monthly payments. Unlike the previous round of stimulus funding, Congress passed this measure using budget reconciliation and could not exempt these funds from Levy and restraint as a matter of federal law.

In March, New York State passed a law (S5923-A) that exempted federal stimulus check payments as well as tax refunds, recovery rebates, refundable tax credits, and any advances of tax credits for under the ARP from Levy and restraint under NYS law. The law does not protect child support payments. The language is intentionally written broad enough to include the tax credits that some of your members are going to begin to receive this week. In addition, the law prohibits state chartered financial institutions from the right of set off against these funds.

Against this backdrop, neither federal nor state credit unions have the legal authority to Levi or restrain these funds on behalf of third parties. In addition, state chartered credit unions don’t have the authority to set off these funds to satisfy delinquencies. Since federal credit unions have explicit authority under federal law to exercise a right of set off then they can set off these funds. Whether it’s smart to do so is an entirely different question.

The anticipated payments also underscore NACHA’s concern with the availability of payments under its existing rules. As I explained in this recent blog, financial institutions frequently receive ACH credits days before the sending entity wants the credits posted for payments. Right now, however, there are no penalties imposed against receiving institutions which make money immediately available to account holders. Later this week comments are due to NACHA about whether or not the existing regulations should be changed. The association would love to get your feedback on this issue.  

July 12, 2021 at 9:56 am Leave a comment

New Requirements Finalized for Delinquent COVID-19 Homeowners

Hello Folks,

For those of you who do mortgage lending, your summer just got a little busier.  The CFPB has issued highly nuanced amendments to its existing regulations dealing with delinquent borrowers that have to be in place by August 31st.

For months the CFPB has expressed concern that as federal and state laws protecting individuals from foreclosure end, there will be a huge increase in foreclosures that will disproportionately impact minority communities. As originally proposed, the regulations put forward by the CFPB would have had the practical effect of preventing most foreclosures through the end of this year. These final regulations don’t go that far but they impose nuanced amendments for dealing with homeowners impacted by Covid-19 which your policies and procedures will have to reflect. Remember every box you don’t check off represents one more potential delay in a foreclosure.

I will be getting into the weeds in future blogs, but for now, among the most important things to keep in mind is that the regulations implement a streamline loan modification process under which mortgages that meet certain conditions can be evaluated for potential modifications by a servicer who has not received a completed application. Additionally, the regulations prescribe specific information which must be provided to delinquent borrowers. For instance, a servicer must inform a borrower that there are programs for individuals having difficulty making payments because of the Covid-19 emergency; list and describe the applicable programs and tell the borrower of at least one way they can find contact information for homeownership counseling services.

There is much more but for now, I want to make sure you start delving into this regulation if you haven’t done so already.

It’s Back!

New York Congresswoman Carolyn Maloney kicked off the holiday weekend by introducing the “Overdraft Protection Act of 2021.” If enacted, the bill would restrict overdraft fees by, among other things, requiring that such fees be “reasonable and proportional” to the cost of processing these transactions and limiting the number of overdraft fees that can be imposed on any one consumer. Expect an even bigger push to get the legislation done this year.

July 6, 2021 at 9:45 am 1 comment

What The End of New York’s State of Emergency Means For Your Credit Union

When you specialize in compliance, even good news can keep you up at night. So it goes with Governor Cuomo’s announcement that he was ending the state of emergency he imposed on March 7th 2020 in response to this thing called COVID-19.

On the one hand, this is of course great news; on the other hand almost immediately, the Association started receiving phone calls about what effect this would have on existing policy and procedures put in place during the pandemic. With the caveat that this is not intended as a definitive list, here is what we know so far:

The executive orders authorized notaries to notarize documents over the internet. This authority has ended. The Department of State issued this memo informing us that effective June 24th, this authority came to an end. Clearly this prohibition is intended to apply prospectively but for those of you who do mortgages don’t be surprised if title insurers raise questions about the validity of your notarizations. They are a nervous a lot. The good news is that the legislature passed a bill to permanently authorize remote notarization.  Perhaps this will spur quicker action on that bill.

An executive order had extended the expiration date of licenses. I know credit unions have relied on this authority when opening up new accounts for members. This authority also came to an end on June 24th 2021. You may want to put a note in your files so that future employees and examiners reviewing account documentation understand that appropriate procedures were used.

Lending was of course another area where the executive orders had a big impact. But many of those early executive orders issued by the Department of Financial Services have been superseded by laws passed by the Legislature. Most importantly § 9-X of the Banking Law which mandates loan forbearance periods for individuals impacted by COVID-19 applies between March 7th 2020 and the latter of December 31st 2021, or the end of the emergency orders. In addition, pursuant to law, New York’s foreclosure moratorium remains in effect until August 31st 2021.

Then there are of course the HR issues. You still have an obligation under both New York law and general OSHA standards to protect your employees against the spread of COVID. This means that you still have to address issues such as mask mandates and vaccination requirements.

All this means that, as my man Winston Churchill would say, “Now, this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

On that note, enjoy your day.

June 28, 2021 at 10:14 am Leave a comment

Updated COVID Guidance To Which Your Credit Unions Should Pay Attention

On June 10th, OSHA published updated guidance called for by the Biden administration intended as general workplace recommendations for employers and industries not subject to specific OSHA mandates.

The most important line in the document is that “Unless otherwise required by federal, state, local, tribal, or territorial laws, rules, and regulations, most employers no longer need to take steps to protect their fully vaccinated workers who are not otherwise at-risk from COVID-19 exposure. This guidance focuses only on protecting unvaccinated or otherwise at-risk workers in their workplaces (or well-defined portions of workplaces).” In other words, you have a continuing obligation to protect individuals who are not vaccinated.

For many of us the last year has been a crash course in OSHA regulations. Federal law requires all employers to provide workers with a safe and healthy workplace “free from recognized hazards that are causing or likely to cause death or serious physical harm.”  The pandemic falls into this category. Some industries, such as healthcare, are subject to specific health and safety regulations implemented by OSHA. The guidance to which I am referring is a generic guidance issued for the benefit of all industries not subject to those more specific requirements.

For example, it stresses that “employers should take steps to protect unvaccinated or otherwise at risk workers in their workplaces from the continuing risk posed by COVID. Such steps may include but are not limited to measures we are all very familiar with at this point such as granting paid time off for vaccinations, which is a legal requirement in NYS, and implementing physical distancing for unvaccinated workers in all communal work areas.

The issuance of this regulation raises further questions as to the need for a new law passed in New York which requires employers to adopt workplace health and safety standards for protections against airborne infectious diseases. Employers will have the option of adopting sample policies to be provided by NYS. It’s not clear to me how these policies will be much different than the suggested OSHA guidelines. Then again, New York’s law has a lower standard for imposing legal liability against employers who violate these policies and requires that employers with 10 or more employees give their employees the option of creating workplace safety committees.

On that note, enjoy your weekend. If you’re looking for something to do this morning I will be hosting a webinar looking back at some of the key legislation passed in the recently concluded legislative session.

June 18, 2021 at 9:18 am Leave a comment

Important Updates on EEOC guidance and NYS Infectious Disease Standards

Memorial Day may mark the unofficial start of summer but last week added several things to your HR person’s to-do list before she goes on vacation.

First, amendments have been proposed to a recently passed NYS law – the HERO Act – imposing state level infectious disease work place safety standards on all employers and mandating that those with ten or more employees authorize the creation of worksite health committees. The changes will narrow employer obligations but even with the anticipated changes there is still work to be done.

Under the original legislation, the state was going to be responsible for developing infectious disease standards by industry. This chapter amendment clarifies that standards will only vary for the largest industries in the state and those determined by the Commissioner Of Health to have unique requirements. This means that many employers will be able to comply with this law by adopting a general model policy standard to be issued by the state.

You’ll also have more time to prepare for these changes.   Under the existing legislation, parts of the law were going to take effect in less than 30 days. In contrast, you are now required to implement these policies within 30 days after they are published by the Commissioner of Health.

Another area of concern addressed by these changes involves an employer’s scope of liability.  Most importantly, only employees who can demonstrate they are harmed by violations of the new standards will be able to sue employers.  The changes also eliminate liquidated damages and require employers to be given notice of violations before being sued.

Under the law, employers with 10 or more employees will have to give employees the option of creating workplace safety committees. The proposed changes slightly narrows the scope of these committees by clarifying they have no jurisdiction to analyze Workers Compensation policies. In addition, committee meetings can now be limited to two hours per quarter.

                                                                EEOC Issues Vaccination Guidance

On Friday the Equal Employment Opportunity Commission issued important guidance clarifying that employers can require employees to be vaccinated provided they are mindful of the need to reasonably accommodate employees with disabilities and those who hold genuine and sincere religious beliefs that may keep them from wanting to get vaccinated. It also gives a green light to employee vaccination incentives.

Since the roll-out of vaccinations, employers have grappled with how best to get their workplaces vaccinated. The guidance closely tracks advice that many lawyers have already given employers. There are several qualifications to the EEOC’s guidance and you would be well advised to closely read the guidance before making any policy changes.

June 1, 2021 at 9:40 am Leave a comment

Three Things to Ponder As You Start Your Credit Union Day

It’s been another busy week in credit union land.  Here are some of the key things to ponder as you finish your second or third cup of coffee.

Municipal Deposits Bills Advance

Legislation that would finally permit municipalities to deposit their funds in credit unions, if that is where they think they can get the greatest benefit for their taxpayers, jumped a major legislative hurdle yesterday when A7334 sponsored by Assemblyman Pichardo was passed out of the Assembly Banks Committee. Companion legislation- S670 by Senator Sanders– was passed out of the Senate’s Bank Committee earlier this week. Now both bills are in the Finance Committees of their respective chambers with plenty of time left to get this done before the end of the session.

To Mask or Not To Mask, That is the Question

Now that the CDC has modified its mask guidance and Governor Cuomo has followed suit, credit unions in New York State are considering what changes, if any, they are going to make to mask wearing policies for both members and staff. Here are some things to consider as you implement your changes.

First, take the time to read both the entire CDC guidance and the Governor’s announcement. For instance, did you know that even as he announced that New York would defer to the CDC guidance, the Governor stressed that the state’s Department of Health continues to “strongly recommend” that masks continue to be worn in indoor settings where vaccination status of individuals is unknown. In addition, the CDC is continuing to take a more conservative approach when it comes to hopping on the plane for the long awaited return to an in-person conference.

In many ways the HR issues that your credit unions have to navigate are even trickier. For instance, to the extent you give employees more flexibility based on proof of vaccination, remember the need to provide reasonable accommodations under the ADA to disabled persons who can’t get the vaccine for health reasons.

Given these complexities, your changes should, of course, be in writing but stay flexible. With variants raging around the world and this country still nowhere near approaching herd immunity, you can bet you’re going to have to modify your procedures in the coming months.

CFPB Updates Mortgage Lending Guidance

CFPB’s Q&As on TRID compliance are in many ways the Rosetta Stone of mortgage lending. So when I heard that the CFPB had updated its guidance in response to the federal BUILD Act yours truly was a little nervous. Full Disclosure: I had not heard of the BUILD Act. 

The BUILD Act is legislation signed into law by President Trump in early January. It authorizes not-for-profits offering low-interest mortgage loans that meet certain criteria to provide modified loan estimates and closing disclosures. It is a common complaint among not-for-profits that the regulatory burdens imposed on them by TRID make it difficult to provide loans to the people who need them most. I couldn’t agree more. It’s a shame that Congress takes such a narrow view of which institutions could benefit from greater lending flexibility.

May 20, 2021 at 10:03 am Leave a comment

Albany Moves On CU Priorities

Yesterday saw some important movement on legislation impacting credit unions.

First, legislation that would permit municipalities to deposit money in credit unions has been placed on the Senate Banking agenda which meets this Tuesday, May 18th. S670 sponsored by Banking Committee Chairman Sanders is of course a key priority for the industry.

Currently, municipalities, including school districts and local towns throughout the state, are prohibited from placing their money in credit unions even when it could help New York’s taxpayers by generating more interest on public funds and providing much needed competition in an area where banks currently hold a monopoly. We will be coming out with a Call To Action later today.

Secondly, yesterday the Governor signed legislation to exempt from levy and restraint COVID-19 stimulus payments. More specifically, the bill exempts from collection any payment to individuals under the Federal Family First Coronavirus Response Act exemption for emergency relief funds. Any payments to individuals, including tax refunds, recovery rebates, refundable tax credits, and any advances of any tax credits, under the Federal Families First Coronavirus Response Act (FFCRA), Coronavirus Aid, Relief, and Economic Security Act of 2020  (CARES Act), Consolidated Appropriations Act of 2021, and the American Rescue Plan Act Of 2021 (ARPA). The exemption does not apply to child and family support payments. In addition, the bill prohibits financial institutions from exercising a right-of-set-off on these funds. 

The Association joined with CUNA in advocating for stimulus payments to be exempt from levy and restraint.  Congress did not exempt the latest round of stimulus payments from levy and restraint apparently because doing so would have violated budget reconciliation rules which allowed the measure to be passed in the Senate by a simple majority.

May 14, 2021 at 9:22 am Leave a comment

NY Extends and Increases Foreclosure Moratorium

The New York State Legislature just passed what it is proclaiming to be the strongest moratorium law in the country.  

Specifically, it has passed a measure (S6362-A) extending until August 31, 2021 an eviction and mortgage moratorium. The law, which was originally passed in December and signed by the Governor applies to both tenants facing eviction and individuals with ten or fewer residential mortgages, one of which is their primary residence.  This prohibition does not apply to mortgages owned by Fannie Mae or Freddie Mac, which are subject to a separate moratorium.

A second closely related measure (S5742) extends the foreclosure moratorium to commercial tenants in New York State that employ up to one hundred or fewer employees or was closed to in-person operations by executive order between May 15, 2020 and May 1, 2021 and employs up to five hundred employees.

May 5, 2021 at 9:50 am Leave a comment

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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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