Cornerstone July Newsletter

INDUSTRY NEWS

NMLS MODERNIZATION: JULY ENHANCEMENTS

The Nationwide Multistate Licensing System (NMLS) has announced updates in its July release, as part of a multi-year initiative to improve the NMLS experience for industry and regulator users. The updates in this release address several user pain points and establish the foundation for future updates. July enhancements include:

• New Login Process
• Improved Account Recovery Process
• Single Login for Multiple Accounts
• User Profile Management
• New Feedback Survey
• Improved Individual Account Creation

The updates reflect ongoing efforts to improve operational efficiency and user experience within the NMLS framework. Click here for a complete overview.

?

?

MINNESOTA

DEBT COLLECTION REFORMS?

The Minnesota Governor recently signed a law introducing a series of reforms for Debt Collection relating to collection agency licensing, coerced debt, medical debt limitations, property exemptions, and wage garnishment.

?

WAIVER OF COLLECTION AGENCY LICENSE REQUIREMENT IS EFFECTIVE AUG 1.

The Commissioner of Commerce can exempt a nonresident collection agency and its affiliated collectors from licensing and registration requirements if two conditions are?met:

1. There is a written reciprocal licensing agreement between the commissioner and the licensing officials of the nonresident collection agency’s home state.
2. The nonresident collection agency holds a valid license in good standing in its home state.

Despite the waiver, debt collectors must still adhere to the Minnesota Fair Debt Collection Practices Act and other relevant regulations. It is our recommendation to connect with legal counsel to confirm eligibility or Cornerstone Clients can connect with their Licensing Specialist.

Click here to for all the details about the provisions that were passed into law affecting the receivables industry.?

COMPANY UPDATE

NEW CORNERSTONE PORTAL: FASTER, MORE SECURE & EASIER TO USE

Our portal has been redesigned from the ground up to provide you with an enhanced user experience. Featuring a more intuitive interface, improved speed, and state-of-the-art security features, navigating the portal has never been smoother or more secure!

Watch our video walkthrough to see all the new features in action!

MORE NEW FEATURES

ADDED IN-APP CERTIFICATE VIEWER - Quickly and easily view individual licenses in portal with full-width, in-app PDF viewer?

DIGITAL LICENSING CHECKLIST (Coming soon) - Streamline communication and transparency, saving time and reducing confusion by providing clients with real-time updates?

?

LOGIN AND EXPLORE

Cornerstone clients get unlimited access to the Portal at no additional cost. To request a login to your account or to get help accessing your portal, contact your Licensing Specialist or email customersuccess@cornerstonelicensing.com.?

?

?

BLOG POST

DECRYPTING THE DIGITAL ASSET INSURANCE SPACE?

Digital assets, particularly cryptocurrencies, are transforming global financial transactions but come with significant risks, such as the $3.7 billion lost to hacks in 2022. Examine how businesses in this space can navigate insurance challenges, with a focus on key coverage areas like professional liability, crime coverage, and directors & officers (D&O) insurance. As the digital asset market evolves, understanding and mitigating these risks through proper insurance is crucial for long-term success and compliance. Click here to read the full article to stay informed and protect your digital asset ventures.

?

INDUSTRY NEWS

FCC PROPOSES RULE FOR AI-GENERATED CALL DISCLOSURE

The Federal Communications Commission has proposed a new rule requiring clear disclosure for calls generated by artificial intelligence. This regulation aims to enhance transparency by mandating that AI-generated calls must identify themselves as such at the beginning of the conversation. The rule is designed to protect consumers from potential confusion and misuse of automated technologies in communication. If implemented, this disclosure requirement will impact compliance standards for businesses utilizing AI in their calling practices. The proposal highlights ongoing efforts to regulate emerging technologies and ensure consumer protection in an evolving digital landscape.

INDUSTRY NEWS

CFPB SUPERVISORY HIGHLIGHTS FOCUS ON COLLECTIONS AND LOAN SERVICING

The Consumer Financial Protection Bureau recently released its Supervisory Highlights, shedding light on practices in debt collection and loan servicing practices. These findings encompass auto and student loan servicing, debt collection, medical payment products, and financial institution practices. This report is essential reading for industry professionals as it provides a detailed examination of the compliance issues and regulatory expectations in these sectors. Click here to read about the CFPB’s findings highlighting ongoing challenges specifically in customer service and medical debt financing, underscoring the importance for debt collectors and loan servicers to adhere to regulatory standards.

?

?

SOUTH CAROLINA

CHANGES TO MONEY SERVICES ACT?

South Carolina Governor has signed off on? several significant changes to the Uniform Money Services Act, impacting licensing, compliance, and investment requirements for money transmitters.?

• Money Transmission Licensing: The Secretary of State will now prescribe the Money Transmission licensing form. Applicants must provide unaudited financial statements if requested, with a $1,600 application and renewal fee.?
• Delegates and Contracts: Licensees must follow specific procedures before conducting business through authorized delegates and must adhere to minimum contract provisions with them. If a license becomes invalid, all authorized delegates must cease operations immediately.
• Trust and Investment Requirements: Licensees are required to maintain investments that meet or exceed the value of outstanding money transmission obligations. Investments are regulated and must be held in trust in case of insolvency. Specific permissible investments are outlined, including cash, certificates of deposit, and certain government obligations.
• Regulatory Oversight: The Secretary of State has authority to conduct examinations, accept reports from other agencies, and summon key individuals for questioning. Coordination with multistate enforcement bodies and regular reporting by licensees are required.
• Penalties and Appeals: Licensees and authorized delegates are liable for penalties if they operate unlicensed. The measure also details the process for suspending or revoking licenses, including notification requirements, civil penalties, and appeal rights.

Effective immediately, however existing licensees will not be subject to these new regulations until January 1 after enactment.

INDUSTRY NEWS

JUDGE BLOCKS FTC NONCOMPETE RULE

A recent court ruling has prevented the Federal Trade Commission’s new noncompete rule from being enforced. This rule aimed to restrict the use of noncompete clauses in employment contracts, potentially impacting various sectors by limiting companies' ability to enforce these agreements. The court's decision halts the rule's implementation, allowing companies to continue using noncompete clauses as they have historically. The ruling underscores ongoing debates over employment regulations and the balance between worker mobility and business interests. As this legal challenge progresses, it will influence future regulatory and compliance practices in the industry.

?

LLINOIS

MEDICAL DEBT LAWS ENACTED?

Illinois Governor recently signed two significant bills into law aimed at alleviating medical debt for residents. The new laws will eliminate approximately $1 billion in medical debt for low-income individuals and ban the reporting of medical debts on credit reports, significantly impacting how medical debts can be collected and reported. Medical debt is defined as a debt arising from the receipt of health care services, products, or devices. Medical debts do not include debts charged to a credit card or an open-end or close-end extension of credit made by a financial institution to a borrower unless the open-end or close-end extension of credit may be used by the borrower solely for the purpose of the purchase of healthcare services. Both bills took immediate effect upon signing.

FEDERAL REQUIREMENT

BOI REMINDER

With less than 5 months remaining to report your Beneficial Ownership Information (BOI) to FinCEN, it's crucial to take care of this Federal compliance item as soon as possible. The penalties for?BOI reporting violations are levied at $591/day, effective Jan. 25.?

NOTE: DISOLVED ENTITIES ARE SUBJECT TO CTA REPORTING

FinCEN recently clarified that if an entity was dissolved after January 1, 2024, it is still required to file the BOI.

?

CORNERSTONE CAN HELP

Cornerstone can handle the filing of your BOI report with FinCEN on your behalf. This service is designed to save you time and ensure accuracy. If you are a client, we likely already have all information needed in order to file on your behalf.?

Our dedicated team is ready to assist you. Connect with us today to learn more or move forward with Cornerstone handling your CTA filing. If you are already a Cornerstone client, please book time directly with Beth Aide, Sr. Customer Success Manager.

?

NEW JERSEY

MEDICAL DEBT RELIEF ACT

The NJ Legislature has passed the Louisa Carman Medical Debt Relief Act, aimed at alleviating financial hardship and curbing aggressive debt collection practices. Key provisions of the bill include a ban on reporting medical debt to consumer reporting agencies (CRAs) for services performed after the bill's effective date. It also restricts CRAs from including paid medical debt or debts under $500 in reports. Collection actions must be delayed by 120 days after the first bill and require offering a reasonable payment plan. The bill caps interest rates on medical debt at 3% annually and prohibits wage garnishment for those earning less than 600% of the federal poverty level. Additionally, it bars debt collection efforts while insurance reviews are pending and invalidates any medical debt reported in violation of these provisions. The bill is awaiting Governor Murphy’s signature.

PENNSYLVANIA

UPDATES DATA BREACH NOTIFICATION LAW

Pennsylvania has updated its data breach notification law, effective September 26, 2024. The amendments require organizations to notify the Attorney General if a breach affects more than 500 individuals, including detailed information about the breach. The threshold for reporting to consumer reporting agencies has been lowered from 1,000 to 500 affected individuals. Additionally, entities must cover the costs for affected individuals to access one credit report and one year of credit monitoring services. Organizations must now implement stricter data security measures and ensure timely reporting to avoid penalties.

INDUSTRY NEWS

HOUSE PASSES CRYPTO ANTI-ILLICIT FINANCING BILL

The U.S. House of Representatives recently passed the "Financial Technology Protection Act of 2023," aiming to create a fintech working group to combat terrorism and illicit financing in the crypto space, if passed by Senate. This group will include federal agencies and key stakeholders from fintech and blockchain sectors to develop regulatory recommendations. The bill highlights the need for collaboration to protect innovative technologies and prevent exploitation by adversaries. This move reflects increasing legislative support for cryptocurrency regulation and underscores the importance of safeguarding the financial ecosystem.

RHODE ISLAND

NEW DATA PRIVACY LAWS

The recently enacted "Rhode Island Data Transparency and Privacy Protection Act" applies to for-profit entities conducting business in RI or targeting customers in the state (with key exemptions). The law grants customers rights to control their data, sets up obligations for data handling, and sets strict compliance requirements. Effective January 1, 2026., Click here to learn more about this legislation and its operational impact on your business.

?

BLOG POST

TRENDS AND CHALLENGES IN DEBT BUYING?

Explore the evolving debt buying industry, where market trends and regulatory challenges shape business strategies. Click here to delve into the latest trends, from technological advancements to legislative updates, and highlights the critical challenges faced by industry players. Learn how these factors impact operations and discover strategies for navigating this dynamic landscape.

?

CORNERSTONE CAN HELP

SURETY BONDS

Surety Bonds can feel like just one more hassle standing in the way of your compliance. You want to close?the loop on your licensing or permitting requirements and get back to what you do best – running your business. But the process can be slow, costly, and downright stressful. And while you’re waiting, you’re losing out on potential clients and revenue.

At Cornerstone, we understand and we’re here to help. Our team of experts work tirelessly to get you the surety bond you need quickly and at a fair price. No more lengthy waits for a response or being hit with hidden fees. Plus, our dedication to exceptional customer service ensures a stress-free experience from start to finish.

?

?

VIRTUAL SUGGESTION BOX

We’ve continued to hear great feedback from you, our clients, on how our newsletter provides value for your organization. To ensure we continue to research and provide the best data, we have created a virtual “suggestion box” for your ideas. Whatever topic you’d like to learn about, large and small, we will go research with our team and knowledgeable folks from our industry.?

?

INDUSTRY NEWS

CFPB PROPOSES SWEEPING CHANGES TO MORTGAGE SERVICING RULES

On July 10, the CFPB announced proposed rules to significantly modify the existing mortgage servicing framework under the Real Estate Settlement Procedures Act (RESPA) and Regulation X. The key changes include:

1. Establishing new "foreclosure procedural safeguards" that require servicers to exhaust all possible loss mitigation options before proceeding with foreclosure.
2. Streamlining the loss mitigation application process by removing the requirement to collect a "complete application" prior to evaluating borrowers for assistance.
3. Prohibiting servicers from charging certain fees during the loss mitigation review cycle.
4. Enhancing early intervention and communication requirements, including providing notices and loss mitigation information in the borrower's preferred language.
5. Applying these new rules broadly, with limited exceptions for small servicers.

The proposed rules aim to prioritize loss mitigation over foreclosure, reduce paperwork burdens, and improve accessibility for borrowers, especially those with limited English proficiency. Mortgage servicers should closely monitor this development, as the new compliance requirements could significantly impact their operations if the rules are finalized as proposed.

FLORIDA

NEW LAW REGULATING CONSUMER FINANCE LOANS, LICENSING REQUIRED

Florida recently revised the state's regulations for consumer finance loans. The bill requires businesses to obtain a license before issuing consumer finance loans in Florida. It adjusts the maximum interest rates that lenders can charge on different portions of a loan, ranging from 36% on the first $10,000 to 24% on the portion between $20,000 and $25,000. The minimum time before a delinquency charge can be imposed has been increased from 10 to 12 days and lenders are now required to offer borrowers credit education programs or seminars. The law also includes provisions related to lender obligations during FEMA disasters and reporting requirements. The law went into effect on July 1, 2024.

Connect with us today - Cornerstone is standing by to handle all licensing requirements to ensure compliance for our clients.?

?

INDUSTRY NEWS

CFPB PROPOSES TO REGULATE EARNED WAGE ACCESS PRODUCTS AS LOANS

The CFPB has proposed a new interpretive rule that would characterize earned wage access (EWA) products as extensions of credit, subject to the Truth in Lending Act and Regulation Z. Under the proposed guidance, features like "tipping" and "expedited funds delivery fees" would be treated as finance charges, requiring creditors to make disclosures required for unsecured credit. However, employer-sponsored EWA programs provided at no cost to employees would not require such disclosures. The CFPB's proposed rule contradicts its previous 2020 guidance, which had stated that certain EWA products were not considered credit if they met specific conditions. The proposed rule also targets voluntary "tipping" features, providing factors to determine if they constitute finance charges. If finalized, the rule may require creditors offering EWA programs to obtain lending licenses in the states where they operate.