Weekly COVID-19 Member Alert - Receivables Management Association International

CONTENTS:

State Updates: Illinois, Nevada, New York
RMAI Legislative Fund
RMAI COVID-19 Resources

State Updates: Order Extended, Stay Lifted, Courts Reopened, Guidance Issued

Illinois Governor Extends Executive Order Through July 26, 2020

On June 26, 2020, the Governor of Illinois announced an extension of the state’s COVID-19 Emergency Declaration through July 26, 2020. For reasons too numerous to reference in this Alert, the Governor remains extremely concerned about the current state of the COVID-19 virus and its impact on the residents of the state of Illinois. His proclamation identifies at least 40 data points which suggest the virus is not under control within the state and that a second wave is likely.

So, what does this mean? Members who do business within the state of Illinois are reminded to stay the course. Ensure collection agents who deal with consumers within the state of Illinois continue their diligent efforts to detect individuals who may be eligible for your hardship program or the hardship program of the hospital or creditor for which debt is being collected.

Members are also reminded that accommodations you make to adjust payment plans and payment schedules, waive interest or suspend payments should not be reported negatively to credit reporting agencies so long as the consumer makes the payments or otherwise complies with the terms of the accommodation. According to the Coronavirus Aid, Relief, and Economic Security (CARES Act), when a furnisher reaches an “accommodation” (as defined therein) with respect to one or more payments on a credit obligation or account of a consumer, the furnisher shall report the credit obligation or account as “current.”

Click here for more information.

Nevada Lifts “Stay” on Garnishments

Effective June 30, and extending through July 31, 2020, Directive 17 which among other things prohibited garnishment proceedings and execution actions currently being adjudicated by a court in the state of Nevada, will terminate and no longer be effective.

Click here for more information about Directive 17 and the Governor of Nevada’s Order dated June 29, 2020.

So, what does this mean? Due to the complexity of the garnishment and the execution process and the potential negative impact these proceedings may have on an employee, members should confer with independent legal counsel and their creditor or debt buyer clients as to the practicality of pursuing these post judgment remedies at this time or if waiting to see if the state of Nevada permanently lifts the restrictions on garnishments and executions at the end of July.

New York Update on COVID-19 Developments Affecting Courts and The Justice System

As of June 26th, all courts outside New York City were operating at the Phase 3 implementation level of the state’s return to in-person operations plan. Under Phase 3, staffing levels were increased in all affected courts to expand the types of matters being heard in-person while relegating most non-essential matters to be heard virtually.

On July 1, 2020 courts in the 5th, 6th and 7th Judicial Districts entered Phase 4 of the state’s economic reopening plan. On July 6, 2020, courts in the 4th and 8th Judicial Districts were added to the list of districts cleared to operate at Phase 4 of the reopening plan. Courts in the 3rd and 9th Districts, and the 10th District on Long Island, continue to operate at Phase 3 of the state’s reopening plan and await the Governor’s approval for the transition into Phase 4.

Phase 4 comes with a significant increase in the number and types of matters that will be heard in-person in the courthouses. Proceedings most impacted by the move to Phase 4 include criminal court proceedings and civil court proceedings before the state Supreme Court where at least one party is unrepresented.

So, what does this mean? With the opening of Phase 4, there will be a corresponding increase in nonjudicial staffing levels in order to support the expansion of in-person services, but the majority of court matters will continue to be heard virtually with judges relying on technology and electronic appearances to keep courthouse occupancy at safe and manageable levels. Members who process residential and commercial foreclosure proceedings are reminded, similar to eviction proceedings, these proceedings may only be initiated by using the state’s electronic filing system or the U.S. mail and now require two additional documents: an affirmation of counsel and a form notice to defendants.

The safety measures currently implemented to prevent the spread of COVID-19, such as the wearing of facemasks, personal distancing, the provision of sanitizing agents, and the use of plexiglass barriers will be expanded to include temperature screening and questioning of all courthouse visitors before they proceed through security and enter any of the court’s buildings.

Click here for more information from Chief Judge DiFiore regarding the reopening of the court system in the state of New York: June 29th update and July 6th update.

Guidance to New York State-Regulated Financial Institutions

Over the past several months, the New York Department of Financial Services (Department), the Governor of New York and the state’s Attorney General have issued a variety of orders, edicts and guidance to address the significant financial hardship COVID-19 has caused for many of its constituents. On June 17, 2020, the Department urged all regulated financial institutions to continue efforts to alleviate the hardship caused by COVID-19 by taking the following reasonable and prudent actions when furnishing consumer information to consumer reporting agencies:

Ensure compliance with Section 623(a)(1)(F) (enacted as part of the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, by reporting the credit obligation or account as “current,” unless such credit obligation or account was delinquent before the accommodation, or has been charged off by the furnisher;
In the case of consumer credit information relating to student loans, ensure compliance with Section 3513 of the CARES Act, for the purpose of consumer credit reporting, by treating any suspended payment as if it were a regularly scheduled payment made by a borrower;
Report credit obligations of consumers who have missed or are delinquent in making payments under a credit obligation after January 31, 2020, as the result of COVID-19, but for whom no accommodation has been reached that would requiring reporting as current under Section 4021 of the CARES Act, as forborne, deferred, affected by a natural or declared disaster, or otherwise report that the payment(s) are not due, consistent with the furnisher’s treatment of such account;
Review credit obligations that such financial institutions have reported as delinquent following January 31, 2020, that had been reported as current prior to January 31, 2020, to verify that the reporting of such credit obligation (both retrospectively and prospectively) complies with the CARES Act, and if the credit obligation is not required to be reported as “current” pursuant to the CARES Act, report the credit obligation as forborne, deferred, affected by a natural or declared disaster, or otherwise report that the payment(s) are not due, consistent with the furnisher’s treatment of such account.

Click here for a complete review the Department’s June 17 Guidance and click here to review additional guidance required by the Department.

So, what does this mean? The state of New York is basically doubling down on the requirements imposed on data furnishers under the CARES Act. Members who credit report should review their credit reporting policies to ensure workflow is in place to properly manage the reporting of debt owed by consumers for which an accommodation has been made regarding payments and suspensions of payments. Basically, if you have made accommodations to help people impacted by COVID-19, and these people comply with the terms of the accommodation, they need to be reported as current so long as they were not delinquent on their payments prior to January 31, 2020.

Alternatively, for consumers who were current prior to January 31, 2020, but who fall behind on payments after January 31, 2020, and who are not given an accommodation; report the status of their debts as forborne, deferred, affected by a natural or declared disaster.

Special workflow should be implemented for accommodations made for the repayment of student loan debt.

Guidance to New York State-Regulated Consumer Credit Reporting Agencies

In response to the pandemic, the Department has announced all New York State registered and regulated consumer credit reporting agencies have agreed to take the following reasonable and prudent actions to avoid unjustified negative impacts on consumer credit reports, which may adversely impact consumers’ credit scores:

Allow consumers access to at least one free credit report per month for six months beginning June 1, 2020, to ensure consumers have the opportunity to quickly identify and correct incorrect information or fraudulent activity;
Apprise furnishers, via website, e-mail, or other means, of the requirements of Section 623(a)(1)(F) of the Fair Credit Reporting Act (enacted as part of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act);
If the CCRA accepts student loan information in the regular course of business, apprise furnishers, via website, e-mail, or other means, of the requirements of Section 3513 of the CARES Act, which requires that any payment that has been suspended is treated, for the purpose of consumer credit reporting, as if it were a regularly scheduled payment made by a borrower;
Use procedures designed to permit a furnisher to report consumers who have missed or are delinquent in making payments under a credit obligation after January 31, 2020, as the result of COVID-19, but for whom no accommodation has been reached pursuant to Section 4021 of the CARES Act, to report such missed or delinquent payments under a credit obligation as forborne, deferred, affected by a natural or declared disaster, or otherwise report that the payment(s) are not due, consistent with the furnisher’s treatment of such account, and communicate the availability of such procedures to furnishers;
If the CCRA, during its ordinary course of business, identifies credit obligations reported as delinquent following January 31, 2020, that had been marked current prior to January 31, 2020, communicate with the respective furnisher regarding such credit obligations to provide the furnisher an opportunity to verify that the reporting of such credit obligations (both retrospectively and prospectively) complies with the CARES Act, and if the credit obligations are not required to be reported as “current” pursuant to the CARES Act, remind the furnisher of its ability to report the credit obligations as forborne, deferred, affected by a natural or declared disaster, or otherwise report that the payment(s) are not due, consistent with the furnisher’s treatment of such accounts;
If a consumer disputes the completeness or accuracy of any item of information contained in a consumers’ file at the CCRA and notifies the CCRA directly, or indirectly through a reseller, of such dispute, promptly conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate, and record the current status of the disputed information, or delete the item from the file; and
Prominently post on their websites a link to a page dedicated to COVID-19-related information and updates.

Click here to review the additional guidance for credit reporting agencies.

So, what does this mean? The state of New York recognizes credit reporting agencies can assist consumers through this state of emergency by imposing additional requirements on credit reporting agencies. Credit reporting agencies are required to provide furnishers with information to help the furnishers comply with the new data furnisher reporting requirements associated with the CARES Act.

Special workflow should be implemented for accommodations made for the repayment of student loan debt.

RMAI Legislative Fund – Silent Auction Open Now!

The reach of RMAI’s advocacy efforts extends to COVID-19 related actions as well as state and federal regulatory and legislative activity. You can support the Legislative Fund by donating and bidding on items through our virtual Silent Auction, open now!

Click here to access the Silent Auction online.

RMAI COVID-19 Resources

Visit the RMAI COVID-19 resource page on the RMAI website to access other legislative and regulatory guidance and relevant information, RMAI Member Alerts, COVID-19 webinars, and more.

https://rmaintl.org/education/live-webinar-series/

RMAI provides timely and informative updates to members through Member Alerts (like this one) and webinars. RMAI members have complimentary access to all recorded webinars.

RMAI’s Commitment to Consumers and FAQs. The communication is posted in the Resources for Businesses, Employers and Consumers section of the COVID-19 resource page as well as on the Consumers page of the RMAI website.

This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.