- State Updates: Connecticut, New York, Idaho
- RMAI COVID-19 Resources
State Updates: Updated Regulatory Guidance and Recovery Loan Programs
No Action Position Regarding Temporarily Working from Home Due to COVID-19 Extended
On May 20, 2020, the State of Connecticut’s Department of Banking issued an announcement indicating it would continue to allow consumer collection agencies to operate unlicensed branch offices for employees who temporarily work from home during the COVID–19 outbreak. Other licensees affected by the announcement include, but are not limited to, debt adjusters, debt negotiators, mortgage servicers, and student loan servicer licensees. This announcement was the third of its kind and extends the department’s original no action position through June 30, 2020.
So, what does this mean? Under Connecticut law, licensed consumer collection agency includes both third party debt collectors and debt buyers.
“Consumer collection agency, means any person or entity who is: (A) engaged as a third party in the business of collecting or receiving payment for others on any account, bill or other indebtedness from a consumer debtor, (B) engaged in the business of debt buying, or (C) engaged in the business of collecting or receiving tax payments, …” Emphasis added.
Debt buyers and debt collectors alike benefit from the extension of the Connecticut’s Department of Banking so long as the following conditions are satisfied:
- The Connecticut licensable activity is conducted from the home location of an individual working on behalf of a Connecticut CC Licensee;
- The individual is working from home due to a reason relating to the COVID-19 outbreak and has informed the Connecticut CC Licensee of such reason in writing;
- The individual maintains all necessary licenses under Title 36a to conduct such Connecticut licensable activity, including, but not limited to, mortgage loan originator or loan processor or underwriter licensure, as applicable;
- None of the Connecticut licensable activity will be conducted in person with members of the public from the home location; and
- The Connecticut CC Licensee shall at all times exercise reasonable supervision of the Connecticut licensable activity being performed at the home office and ensure that appropriate safeguards and controls are established concerning consumer information and data security.
Click here to access Connecticut’s Downloadable Consumer Collection Agency Licensee List as of March 2, 2020. To review the full announcement click here.
New York Forward Loan Fund and Additional Small Business Administration Loans Available
New York State is working in a variety of ways to support small businesses throughout the COVID-19 crisis. In addition to providing business counseling, the state is also making the New York Forward Loan Fund and additional U.S. Small Business Administration (SBA) loans available. Click here to review the announcement.
New York Forward Loan Fund (NYFLF): NYFLF is a new economic recovery loan program targeting the state’s small businesses with 20 or fewer full-time equivalent (FTE) employees. Preapplications are now open and priority will be given to industries and regions that have been reopened. This is not a first-come, first-served loan program. To be eligible, organizations must meet the following qualifications:
- Small businesses and nonprofits must employ 20 or fewer full-time equivalent (FTE) employees;
- Small businesses must have gross revenues of less than $3 million per year;
- Nonprofits must provide direct services and have an annual operating budget of less than $3 million per year; and
- Have not received a loan from either SBA Paycheck Protection Program (PPP) or SBA Economic Injury Disaster Loan (EIDL) for COVID-19 in 2020.
SBA Paycheck Protection Program (PPP): The PPP provides $659 billion in loans to small business, nonprofits, sole proprietors and other eligible entities with fewer than 500 employees. Loans of up to $10 million can be obtained to cover certain business costs including employee payroll, rent, insurance, paid sick or medical leave, interest on mortgage obligations and utilities. These loans are designed to cover costs incurred between February 15, 2020 – June 30, 2020. Up to eight weeks of eligible expenses may be forgiven and loan repayments will be deferred for six months.
SBA Subsidy Loan Program: The $2 trillion CARES Act also provides benefits for businesses with existing SBA loans. Eligible businesses can apply for the SBA to pay interest and principal payments for six months on their existing SBA loans. Only 7(a), community advantage, 504 and microloans made prior to March 27, 2020 are eligible.
So, what does this mean? Although applications will be approved on a rolling basis, members are well advised to take steps now to prepare their loan application for the NYFLF, particularly if you have already reopened in some capacity. Applications will be reviewed on a rolling basis as regions and industries reopen.
The two small business loans remain open at this time. However, recognizing the state of New York estimates 90% of its businesses are small businesses, members should act now if they need help covering eligible expenses and loan repayments. These SBA funds could be depleted, and no information is available at this time to predict whether new funding will become available. For example, an SBA loan called the SBA Economic Injury Disaster Loan (EIDL) Program is already closed to new applications.
Temporary Regulatory Guidance Regarding Working from Home Due to Coronavirus/COVID-19 Extended
On May 22, 2020, the State of Idaho’s Department of Finance issued additional guidance to licensees regarding the licensure requirements for home offices. Recognizing the continued state of emergency due to the COVID–19 pandemic and the need to provide licensees with more time to evaluate the benefits of a work from home workforce, the department granted an extension of its March 12, 2020, work from home guidance allowing licensed collection agencies to maintain home offices for its employees without obtaining an Idaho branch license or registration for the location. The Temporary Regulatory Guidance now extends to September 1, 2020. Click here to review the Idaho Department of Finance’s announcement of the extension to its Temporary Regulatory Guidance.
So, what does this mean? Members who are licensed to do business by the Idaho Department of Finance are still expected to meet the original requirements of the Guidance and should be prepared to meet any existing licensing or registration requirements after September 1, 2020.
RMAI COVID-19 Resources
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. For your convenience, here are links to recordings of the two most recent COVID-19 webinars:
*Note: To receive a certificate of completion for a recorded webinar you must register through the RMAI Online Education webpage rather than use these links.
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.