CUs Updated on Important CA and NV State Highlights

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This week, the California Assembly announced it is postponing its return from summer recess after several legislators and staffers tested positive for the Coronavirus. Assembly Speaker Anthony Rendon informed members they would not be coming back to the capitol in Sacramento on July 13 as originally planned. There is no scheduled return date yet.

The move was made after Assemblymember Autumn Burke confirmed on Twitter that she tested positive for the virus on the morning of July 4. Meanwhile, it has been reported that the Assembly has a total of five confirmed cases. The Assembly is not identifying if the five confirmed cases are lawmakers or staffers.

Subsequently, the Senate issued a memo stating it will need to adjust its committee schedule to account for the change, while also conveying it is working with Assembly leadership and will provide an updated schedule when it is available.

After the defeat of Assembly Bill 2501, the California Credit Union League is currently engaged on multiple other pieces of legislation in order to protect credit unions. There is an attempt to place a moratorium on foreclosures until Jan. 1, 2022, as well as another public bank bill. This time, the public bank bill would turn the state’s IBank (Infrastructure and Economic Development Bank) into a depository institution. Credit union leaders should be ready to engage lawmakers.

CA DBO Reminds CUs About Face Coverings
The California Department of Business Oversight (DBO) is reminding credit unions that they can, should, and are expected to continue requiring face coverings of all their employees and members. At a news conference, Gov. Gavin Newsom announced that various departments, including the DBO, will be working to ensure this requirement is followed.
 
DBO Commissioner Manuel Alvarez noted that anecdotal conversations with several credit unions indicate credit unions are generally doing a good job in following the requirement. He thanked the League and its members for answering the call. However, the governor and other leaders statewide have also heard of other anecdotes where the mask requirement is not being enforced.

The DBO will be working in the coming days to remind all licensees about the statewide face-cover requirement, and of the statewide guidance by the California Department of Public Health (CDPH). It expects that its licensees continue 1) following the CDPH guidance, and 2) enforcing the face-covering requirement for all employees and customers or members.

CA Privacy Rights Act Qualifies for November Ballot
The California Privacy Rights Act (CPRA) has qualified for the November ballot. The CPRA builds upon the California Consumer Privacy Act (CCPA) and further strengthens consumer privacy rights. The CPRA also creates a new regulatory state agency that will focus on privacy issues.

It is more than likely that the CPRA ballot measure will pass. If it does, the California State Legislature will not have the ability to fix areas of the statue without going back to the voters.

Update on Lawsuit Challenging Nevada’s SB 311
The Nevada Credit Union League, the Nevada Bankers Association, and the American Financial Services Association, on behalf of its members, had filed a lawsuit to challenge the legality of last year’s Senate Bill 311. As plaintiffs, we claimed that financial institutions cannot comply with the statute (NRS 598B.135 [S.B. 311, 20219]) because it conflicts with federal laws, such as the Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA).

On Friday, June 26, 2020, the court dismissed the case without prejudice to the plaintiff’s filing a new case should our claims later become “ripe.” Basically, the court granted the state’s claim that we do not have a “case or controversy.” However, when or if we do, we can file a new claim. The League will discuss this development with the other plaintiffs and legal counsel.

In the meantime, draft regulations are in the works. Section 3, subparagraph 1 of the draft regulations basically state that the statute does not apply when a creditor cannot comply with the statute without violating federal laws.

This is a good start to the draft regulations; however, the League does not believe this is sufficient to protect credit unions. The draft regulations protect a credit union from regulatory enforcement, but not from a private right of action—which would then give a credit union a “case or controversy.”

After the Nevada Financial Institutions Division (FID) completes its Small Business Impact Study, it will then hold public workshops on the draft regulations. The League will monitor this progress and ensure we have representation at the workshop to reiterate our concerns and request the FID support a repeal of the statute. We also will submit formal written comments on any proposed regulations.

If you have any questions regarding the lawsuit or the draft regulations, please contact Sharon Turley, vice president of regulatory advocacy, or Robert Wilson, lobbyist and vice president of state government affairs.

Las Vegas Program to Help With Overdue Rents and Mortgages
The City of Las Vegas is helping qualifying residents who are facing financial hardship due to the coronavirus pandemic and are behind on housing bills, covering up to three months of delinquent rent or mortgage. Under its Housing Assistance Program — which operates on a first-come, first-served basis and is contingent on available federal coronavirus relief funds — the city said it will make the payments directly to an eligible program participant’s landlord or mortgage company.
 
The city publicized the program last week as a statewide moratorium in effect since late March on residential evictions and foreclosures for nonpayment of rent and mortgage is set to expire Sept. 1. Nevada Gov. Steve Sisolak, who directed that resulting late fees or penalties cannot be charged retroactively, has urged landlords and tenants to work out repayment plans between them.

The city’s program requires that individuals pre-apply. It is limited to applicants at least 18 years old and is limited to one pre-application per household. Pre-applications must be turned in by July 31.

NV Directive to Lift Moratorium on Foreclosures
Sisolak has also signed Emergency Directive 025, which will gradually lift the state’s moratorium on evictions and foreclosures. He also strongly urged landlords and tenants to work together and collaborate on repayment plans.
 
Directive 025 lifts the moratorium on evictions and foreclosures imposed by Directive 008 in phases by allowing residential evictions and foreclosures to resume in full on Sept. 1 for non-payment of rents and no-cause evictions. Late fees or penalties for non-payment of rent or mortgage payments may not be charged retroactively.
 
The directive also implements actions and provides information on residential summary evictions and unlawful detainer, commercial tenancies and mortgages, and repayment plans. You can view the news release here.
 
For more information, you can also view the Guidance for Landlords and Tenants (General FAQs) here; the Guidance for Landlords under Directive 025 (FAQs) here; or visit the California and Nevada Credit Union Leagues’ COVID-19 site.

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