30 Mar Nevada and Utah Legislative and Minnesota Regulatory Update
The Nevada legislature when enacting its Foreclosure Mediation Program in 2015, provided for an expiration date of June 30, 2017. The Utah legislature has enacted the Uniform Fiduciary Access to Digital Assets Act (the “Act”), effective May 8, 2017. The Act has also been enacted in various states on which we have previously reported (see our Distribution Memoranda dated September 1, 2016 and update February 17, 2017). The Minnesota Department of Commerce (“Department”) issued a letter, dated January 2, 2017, providing supervisory guidance to individuals with a residential mortgage originator license (“RMO”).
Nevada Senate Bill 512
In June 10, 2015, the Nevada legislature established a Foreclosure Mediation Program to provide borrowers with an alternative to foreclosure. This program expires on June 30, 2017 with all mediations to be completed by April 30, 2017. Please see our memorandum dated June 25, 2015 for additional information on the Program.
UTAH HOUSE BILL 13
The acts in each state have minor differences, but the primary focus of the Act is to define digital assets and the parties involved, which generally includes the following:
- Custodian (person or entity that carries, maintains, processes, receives or stores a digital asset of a user)
- Digital Asset (electronic record in which an individual has a right or interest, but does not include an underlying asset or liability unless the asset or liability is itself an electronic record)
- User (person who has an account with a custodian)
- Designated recipient (person chosen by a user to administer digital assets of the user – can be chosen by online tool or in a document, such as a trust or will)
- Fiduciary (personal representative, executor, administrator, trustee, guardian, conservator, agent, or other person performing in a fiduciary role with regard to a user).
The Act sets forth the requirements and obligations for a custodian to provide a designated recipient or fiduciary with access to the digital assets of a user.
Minnesota Issues Supervisory Guidance Letter to Residential Mortgage Originators
The Department highlighted five deficiencies typically identified in routine examinations with respect to Minnesota laws. The deficiencies are as follows:
- Agency vs. Non-Agency: Failure to properly disclose the agency or non-agency relationship of the lender with the borrower, and Advance Fee Agreements.
- Interest Rate Lock and Discount Point Agreements: Failure to properly disclose the five requirements of the agreement, complete the agreement in entirety, and include a disclaimer that the statement of terms is not an offer.
- Record Retention: Failure to maintain for 60 months the business records, including advertisements, regarding residential mortgage loans applied for, originated, or serviced in the course of its business. This includes loan estimates, closing disclosures and all other loan origination documentation.
- Net Tangible Benefit: Failure to demonstrate the tangible net benefit to a consumer for refinance loans and engaging in churning.
- Trust Funds and Advance Fees: Failure to disclose proper advance fee contracts, deposit advance fees or escrows into a trust account.
The Department asks that regular compliance reviews and quality reviews be conducted to determine if corrective action is required in order to ensure compliance. Failure to take such corrective action may result in administrative disciplinary action and/or civil penalties of up to $10,000 per violation.
The Department also reminds licensees that if they are no longer doing business as a Residential Mortgage Originator, they should follow the surrender instructions on the Nationwide Multistate Licensing System (“NMLS”) to surrender their license.