Posts tagged ‘Remote Notarization’

New York Introduces Further Remote Notarization Changes

In the closing days of December, Governor Hochul signed legislation permitting the use of remote notarization in New York, but coupled her signature with an announcement that further changes had been agreed to.  Yesterday, the Legislature introduced these proposed chapter amendments.

Although I am not quite ready to take a deep dive into the updated framework, if the Legislature passes these amendments, it means that starting January 31, notaries will be authorized to use remote ink notarization (RIN) to notarize a wide variety of documents, including the recording of mortgage documents that is required pursuant to Article 9 of New York’s Real Property Law. 

In the meantime, the effective date for the use of Remote Online Notarization (RON) will be pushed back to January 2023.  For more detail on the distinction between the two, read this recent blog.

Those of you interested in taking advantage of this increased flexibility should take a close look at this legislation, which, if acted on by the Legislature, will provide the guidelines for using this technology.

New York Clamps Down on Real Estate Agents, Fair Lending Violations

In 2019, Long Island Newsday reported on the results of a multiyear investigation into the area’s real estate practices.  It outlined disturbing evidence of widespread Fair Lending violations such as steering minorities to only certain communities.  In one of her last acts in December, Governor Hochul approved a series of measures passed in response to these allegations and subsequent legislative hearings. 

The bottom line is that the package is narrowly focused on additional education and training for the real estate industry, as well as providing increased funding for testing for Fair Lending violations.  As a result, these measures will not have a direct impact on your credit union, but don’t be surprised if you see a noticeable increase in the number of Fair Lending challenges to which lenders are subject in the coming years.

January 11, 2022 at 9:03 am Leave a 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

The Good, The Bad, and The Ugly as Albany’s Session Comes To A Close

Early this morning, the NYS Legislature came to its unofficial end as the Assembly passed the last measures of an extremely active session. Here is a first look at some of the key legislation that will impact CUs if it is approved by the Governor.

In a major legislative accomplishment, credit unions successfully lobbied for legislation which will allow them to participate in the Excelsior Linked Deposit program. The program gives lenders access to state deposits in return for making qualifying small business loans of up to two million dollars. Just how long have credit unions been seeking to participate in the program? Well, one of our volunteer board members lobbied for passage of the bill by showing legislators a letter he wrote in support of credit union participation to the Governor… Governor Pataki.

Credit Unions came up short on legislation which would allow municipalities to place their funds in credit unions but for the first time in at least 15 years, legislation has been voted out of the Senate and Assembly Banks committees. This means that the finance committees will be hearing from plenty of credit unions over the next year.

Finally, credit unions successfully lobbied for passage of legislation which will help bring banking into the 21st century by authorizing the use of remote online notarization. This bill is a win for consumers in general and the elderly and disabled, in particular, who will now be able to more easily get their documents notarized without having to go to a branch. The legislation would also make it easier to sell mortgages on the secondary market.

Now for the bad news. The legislature passed a measure to cap the interest that can be charged on judgements related to consumer debts at 2%. As drafted, the new interest rate would apply to judgements which have been filed but not yet executed prior to the bill becoming effective. If you think that is a recipe for a confusing mess, you’re correct.

Earlier this year, New York’s Court of Appeals wrote a series of decisions restoring a level of common sense to New York’s foreclosure process. The legislature passed a series of measures which chip away at these rulings. For example, Assembly 2502A imposes additional pleading requirements on lenders seeking to foreclose that could otherwise be waived by a homeowner.

Another bill passed by the legislature would extend CRA requirements to licensed mortgage bankers. Crucially, this bill would not apply to credit unions. It would apply to mortgage CUSOs.

Looking ahead, the table has been set for a debate over legislation to impose a California-style data protection framework on NYS. Legislation has been introduced and the Association is seeking to exempt GLB compliant institutions. Get your talking points ready for the trip to Albany next winter.

June 11, 2021 at 9:50 am Leave a comment

Gov Approves HERO’s Act

Good morning folks, with a special shout out to those of you who work in the great state of New York.

The Governor has approved the HERO Act, legislation which mandates that all businesses in NYS implement policies addressing a wide range of issues related to airborne illnesses, such as COVID. For those of you with ten or more employees, you also must give your employees the option of creating committees to address work place health related issues on an ongoing basis.

The bill is phased-in over a six month period with the first requirements taking effect in 30 days. Adopting an approach similar to what we saw when the state passed sexual harassment legislation, the state will be providing sample policies that your credit union can adopt.

One other piece of good news is a reminder that this law applies to both federal- and state-chartered credit unions.

Stay tuned, the Association will be hosting a webinar next Wednesday to take a first look at this important new mandate.

Remote Notarization Hearing Today

At 10 o’clock today, the Assembly will be holding a virtual hearing to analyze issues related to authorizing remote notarization on a permanent basis in New York. Remote notarization refers to the ability of a notary to verify the authenticity of a signature without the signer being physically present. Lisa Morris from Hudson Valley Credit Union will be testifying for the Association.

He’s Back!

The former Benign Dictator of Consumer Finance is back. Ricard Cordray has been given a high profile job at the U.S. Department of Education from which he will oversee issues related to the federal student loan program.  Not coincidentally, his portfolio gives him a high-level platform to address one of the key issues the Biden administration is being pressured to address — whether to forgive or not to forgive all of those student loans — while not being so high as to require Senate confirmation.

California Chimes In

California joined  Illinois’s  financial regulator in prohibiting lending platform Chime from implying in its advertisements and websites that it was a bank as opposed to a lending platform that passes through loans. The state’s actions come as federal and state regulators continue to grapple with the issue of when FinTechs should be classified as banks with the accompanying regulatory requirements that this classification would impose.

Earlier this week the Federal Reserve board issued proposed guidance for the Federal Reserve banks to consider when deciding whether or not FinTechs should be given access to the Federal Reserve System. Don’t underestimate this power: remember it was a Federal Reserve Bank which blocked Colorado from starting a state-level bank to provide marijuana banking services.

Captain obvious here: this is an issue that Congress needs to address sooner rather than later.

On that note, enjoy your weekend. If all goes according to plan, yours truly will be gathering with a group of vaccinated middle age men to play his first round of in-person poker in more than a year.

May 7, 2021 at 9:35 am 1 comment

Get Ready For A Bigger Tax Collection Role

The White House is planning on financial institutions to play an important role in helping to pay for the $1.9 trillion spending plan the President will unveil tonight. 

As explained by the Wall Street Journal, the Biden Administration is proposing increasing the IRS’s budget with the hope of taking in more tax revenue.  An important part of the plan is to expand the reporting obligations of financial institutions.  As explained in this fact sheet released by the White House.  “It would require financial institutions to report information on account flows so that earnings from investments and business activity are subject to reporting more like wages already are.”

Because I’m such a helpful fella, I provided this link to the IRS website just in case you are a little rusty about how backup withholding works.  Call me wacky, but if this plan goes through, it’s going to increase the incentives some people have to be less than truthful about their income. 

Of course this is just a proposal, but if history is any guide, a President’s initial budget proposals are among the most impactful and Congress will have to come up with ways of paying for all of this increased spending. 

Assembly To Hold Hearing On Remote Notarization

One of the initiatives being advocated for by the Association is to make remote notarization – the ability of notaries to certify documents in a virtual environment – a permanent part of New York State law.  An important step towards that goal will take place a week from Friday with the announcement that the Assembly Government Operations, Banks, Consumer Affairs and Protections and the Judiciary Committees will be holding a joint virtual hearing on the subject.  We will be following up with additional information in the coming days.

This Can’t Be Good…

According to a statement released by the CFPB yesterday, mortgage servicer Mr. Cooper made unauthorized withdrawals resulting in hundreds of thousands of consumer bank accounts being debited for multiples of their mortgage payments.  In a terse statement, the CFPB said it is taking immediate action to “understand and resolve the situation”.  This sounds like it is going to get worse before it gets better.  Brace yourself for the reactionary guidance that will undoubtedly be issued by financial regulators in the coming days.

On that note, enjoy your day.

April 28, 2021 at 9:35 am Leave a comment

CU Lawsuit Highlights an Issue We Can All Agree On

Despite the election, one area that Americans can usually find common ground on is the need for more protections for data security. Yesterday, a federal court in Ohio allowed a class-action lawsuit brought against the Sonic restaurant chain by, among others, American Airlines FCU, Arkansas FCU and Redstone FCU to go forward. When you’re talking to those newly minted Congressional members following the election, Sonic Corp. Customer Data Breach Litigation is the best example I’ve seen on why Congress needs to implement uniform data security standards.  

The case involves a data breach that occurred over a six-month period because Sonic used antiquated technology. Most importantly, its point of sale terminals were not required to have encryption technology, giving hackers easy access to card information for several months. That encryption has, of course, become common practice for many institutions and is a required component of the data protection plans for all New York State Chartered and licensed institutions. 

The case is also instructive for another reason. One of the key issues in data breach litigation continues to be determining who is actually injured by a data breach. In seeking class-action status, the financial institutions argued that the class of plaintiffs eligible to sue Sonic should include “All banks, credit unions, financial institutions, and other entities in the United States that received an alert of a potentially compromised account from any card brand in the Sonic Data Breach.”  The court slightly modified this class, allowing the suit to go forward for “all banks, credit unions, and financial institutions in the United States that received notice and took action to reissue credit cards or reimbursed a compromised account from any card brand involved with the Sonic Data Breach.” In contrast, merchants continue to argue that only persons who can demonstrate that their data was actually stolen by hackers should be able to sue. 

In short, this case is the latest example of how merchants want to benefit from card technology, but make financial institutions responsible for all the risks and costs associated with its use. 

New York Extends Remote Notarization Authorization

Earlier this week, the Governor’s office issued another extension of its remote notary authorization. This is welcome news for those of us requiring notarization for documents – especially as COVID-19 cases begin to surge again across the country.

November 5, 2020 at 9:22 am Leave a comment

Legislature Breaks for the Summer; NCUA Moves Closer to Getting More Money for the Industry

The New York State Legislature adjourned yesterday, ending a bizarre hybrid session in which a spattering of members spoke from the floor while others participated via Zoom.  It was almost as strange as watching homerun balls landing into empty seats.  The legislature is not committed to coming back, but with the continuing uncertainty surrounding the state’s finances, no one would be surprised to see it reconvene later this fall.  Against that backdrop, here are a few key bills I want to tell you about today; we will provide you with a more detailed list early next week.

A bill to make remote notarization a permanent part of New York State law passed the Senate but has yet to be acted on in the Assembly.  This is important progress and yours truly remains optimistic that remote notarization will become part of New York State’s law.  The current Executive Order 202.53 authorizing remote notarization expires on August 20th.

As tough as New York’s existing forbearance requirements are, they stood to become a lot worse.  A pair of bills, A10532-A and A10544, would have extended New York’s COVID-19 forbearance requirements to commercial rentals and retail space.  These provisions would have only applied to state chartered institutions. Fortunately, neither of these bills was passed.

Finally, in a recent blog, I analyzed bill A5630A which would make major revisions to New York’s Power Of Attorney laws.  This bill has been passed by the Legislature but now must be sent to the Governor for his consideration.  If it is signed, your credit union will have six months to prepare for many of the changes.

NCUA Corporate Litigation Can Go Forward

A New York federal judge yesterday refused to dismiss a lawsuit brought by NCUA against U.S. Bank National Association.  The lawsuit claims, among other things,  that the bank, which was responsible for overseeing the trusts in which many of the Residential Mortgage Backed Securities purchased by the corporates were held, breached its contract with the corporates by failing to take action against  originators who provided mortgages that didn’t meet the appropriate underwriting standards.  By defeating this motion, the likelihood increases that NCUA will recover more money on behalf of the share insurance fund.

NCUA vs US Bank National Association

July 24, 2020 at 10:05 am Leave a comment

Five Things You Need To Know To Start Your Credit Union Week

New York State extended until July 6th an increasingly important Executive Order permitting the use of remote notarization.  In recent weeks as we have gotten feedback from credit unions about the key issues to champion going forward, remote notarization has emerged as a top priority.  We will be reaching out to all of you in the not too distant future.  So stay tuned and be ready.  Oh boy!

CUNA Board Passes Racial Justice Resolution

This time really is different.  The protests over the death of George Floyd are sparking discussions not only about police tactics but what industries large and small are doing to make America a fairer place.  The credit union industry is, of course, not immune.  On Thursday, CUNA’s Board passed a resolution committing the organization to come up with concrete steps that the industry could take to address racial inequality by August 10th.

New York State DOH Reduces Quarantine Period From 14 to 10 Days

With New York City beginning the first phase of reopening today, anxious employers should be taking a look at this updated guidance from New York’s Department of Health, generally reducing the quarantine period for persons who are either exposed or who have contracted the virus from 14 to 10 days.  Here is a link to the guidance as well as an analysis provided by Bond, Schoeneck and King, LLC.

Will The Shutdown Hasten The Branches’ Demise?

That is a question that you should all be pondering after reading this article in today’s Wall Street Journal reporting that some early analysis is suggesting that the shift towards remote transactions necessitated by the shutdown may lead to a permanent decrease in branch use.  I will have more to say on this in a future blog.  How exciting is that?

A Summer Without Baseball?

Nothing at all to do with credit unions, but could someone please explain to me why a sport structured to ensure social distancing between competitors can’t figure out a way to play a season while basketball, soccer, hockey and most likely football can?  These are the great questions that keep me up at night.

Have a great day.

June 8, 2020 at 9:37 am 2 comments

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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