Consumer Law Changes Taking Effect in 2019

This article lists federal and state consumer law changes that already are scheduled to go into effect in 2019. The article also lists several changes that were effective in November and December of 2018 that will have special relevance in 2019. Of course, other consumer law changes will be enacted later this year and go into effect this year, but this article only lists those whose effective dates have already been scheduled for this year.

November 1, 2018 Effective Date

Bankruptcy Means Test Data: Updated data to compute a bankruptcy filer’s compliance with means tests has been updated for cases filed after November 1, 2018. See https://www.justice.gov/ust/means-testing/20181101. See generally NCLC’s Consumer Bankruptcy Law and Practice § 13.4.3.

December 1, 2018 Effective Date

Class Action Rules: Federal Rule of Civil Procedure 23 is amended concerning class notices, class settlements, and objections to class settlements. The changes are summarized in this article, and more detail is found in NCLC’s Consumer Class Actions. The amended rule and its accompanying 2018 Advisory Committee Note are reprinted at that treatise’s Appendix A.

Bankruptcy Rules and Forms: A number of bankruptcy forms and rules are now amended, and a new rule and a new appendix are added. The most significant changes involve the amount creditors seek in mortgage loan payments through a chapter 13 plan, electronic filing with the bankruptcy court, and procedures concerning appeals from bankruptcy court decisions to the federal district court. These changes are examined in this article, and these rule changes and committee notes discussing the rules changes are now reprinted in NCLC’s Consumer Bankruptcy Law and Practice Appendix B.

January 1, 2019 Effective Date

Truth in Lending Act Credit Card Fees: The Truth in Lending Act has a safe harbor that provides that credit card penalty fees are deemed reasonable if not exceeding set amounts. The safe harbor amounts increase to $28 for the consumer’s first violation and $39 for the second, up from the existing $27 and $38 safe harbor amounts. See 83 Fed. Reg. 43,503 (Aug. 27, 2018), as discussed in NCLC’s Truth in Lending § 7.5.2.3.3.

Truth in Lending Act Exclusion: Other than for credit secured by a residence or student loans, the Truth in Lending Act does not apply to credit with an amount financed over a threshold amount. This amount is now increased to $57,200. See 83 Fed. Reg. 59,276 (Nov. 23, 2018), as discussed in NCLC’s Truth in Lending § 2.4.4.2.

Consumer Leasing Act Exclusion: the maximum size of leases excluded from the Consumer Leasing Act is now increased to leases where the total contractual obligation exceeds $57,200. See 83 Fed. Reg. 59,276 (Nov. 23, 2018), as discussed in NCLC’s Truth in Lending § 13.2.2.

Home Mortgage Disclosure Act: Certain provisions of Regulation C interpreting the Home Mortgage Disclosure Act (HMDA) are amended. In particular, there are changes to section 1003.5 on disclosures and reporting and to section 1003.6 on enforcement, appendix A is removed, and parallel changes are made to the official interpretations. See 82 Fed. Reg. 43,145 (Sept. 13, 2017), as discussed in NCLC’s Credit Discrimination § 4.4.5.

California Doc Fees: Cal. Veh. Code § 4456.5 increases allowable document fees for California motor vehicle sales to a range of $70 to $85, from the prior $65 to $80. Document fees are discussed at NCLC’s Consumer Credit Regulation § 11.4.4.

Maryland Consumer Loans: The Financial Consumer Protection Act of 2018, 2018 Md. Laws ch. 732 (S.B. 1068), allows consumer lenders to opt to be governed by Maryland’s general usury provisions instead of special usury statutes. Which usury statute applies in a state is examined at NCLC’s Consumer Credit Regulation § 3.9.

Massachusetts Collection Lawsuits: New Massachusetts Rule of Civil Procedure 8.1(d)(2) requires creditors filing collection lawsuits involving credit card debt to file with the complaint a detailed affidavit providing specific information about the debt. If the action is brought by a debt buyer, the complaint must be filed with documents evidencing the chain of ownership from the creditor to the debt buyer and the documents must reference the defendant. See NCLC’s Collection Actions § 3.5.1.

Nebraska Small Loans: Nebraska Laws L.B. 194, § 21 sets the minimum loan term for installment loans at six months. Installment loan terms are discussed at NCLC’s Consumer Credit Regulation § 10.4.2.

February 1, 2019 Effective Date

Colorado Payday Loans: Colo. Rev. Stat. §§ 5-3.1-101.5, 5-3.1-105, 5-3.1-108, and 5-3.1-121—by ballot initiative—cap payday loan interest rates and limit subterfuges of the rate cap. Regulation of payday loans is examined at NCLC’s Consumer Credit Regulation Chapter 9.

February 15, 2019 Effective Date

Department of Veterans Affairs Mortgages: New requirements are created for refinancing of the VA mortgages, by adding a new seasoning requirement and a net benefit test. See 83 Fed. Reg. 64,459 (Dec. 17, 2018). See also NCLC’s Mortgage Lending § 3.12.

April 1, 2019 Effective Date

Consumer Financial Protection Bureau Prepaid Rule: The CFPB’s Prepaid Accounts Rule amends Regulation E (on the Electronic Funds Transfer Act) and Regulation Z (on the Truth in Lending Act) so that both regulations’ existing and some new protections now apply to general use prepaid cards, payroll cards, some government benefit cards, some other stored value cards, and card-less mobile prepaid accounts. Financial institutions offering prepaid accounts now must make extensive disclosures, provide access to account agreements, provide either periodic statements or transaction histories, offer error resolution rights, and limit liability for unauthorized transfers. There are also additional protections for accounts that have credit features, such as limits on overdraft fees. The new rule is examined in detail at NCLC’s Consumer Banking and Payments Law §§ 7.2.3 and 7.2.4.

Department of Veterans Affairs Mortgage Loan Modifications: The current programs allowing for modification of VA mortgage loans are set to expire. See United States Dep’t of Veterans Affairs, Circular 26-17-10 (Apr. 7, 2017), available at www.benefits.va.gov. Modification of VA loans are extensively examined in NCLC’s new treatise Mortgage Servicing and Loan Modifications (forthcoming in February 2019).

Bankruptcy Code Dollar Amounts: Over fifty of the dollar amounts found in the Bankruptcy Code will be adjusted upwards for inflation. These dollar amount changes will appear in the digital version of NCLC's Consumer Bankruptcy Law and Practice and later in 2019 in a forthcoming new print revised edition.

May 24, 2019 Effective Date

Credit Reporting of Veterans’ Medical Debt: Public Law No. 115-174 § 302 amends the Fair Credit Reporting Act to provide credit reporting protections for veterans regarding medical debts owed to a non-VA medical provider for VA-authorized medical care where the provider sought payment from the VA, as well as medical debt for bills wrongfully charged by the VA. Protections include no reporting of these medical debts until the debt is over one year old and a new dispute process available for veterans. See NCLC’s Fair Credit Reporting § 5.4.

Free Credit Monitoring for the Military: Section 302 of Public Law No. 115-174 amends the Fair Credit Reporting Act to provide free “credit monitoring” to any military personnel on active duty or in the National Guard. The credit monitoring as defined by section 302 is much more limited than the commercial products currently available, in that the Act only requires electronic notifications of additions or modifications to a consumer’s file, i.e., “alerts.” For a discussion of other credit monitoring products, see NCLC’s Fair Credit Reporting § 3.3.3.1.

June 30/July 1, 2019 Effective Dates

The Uniform Residential Loan Application: Lenders can start using the revised Uniform Residential Loan Application form, and lenders must use it for all Fannie Mae and Freddie Mac loans by February 2020. See Fannie Mae and Freddie Mac Publish Updated Dynamic and Interactive Redesigned URLA and Supporting Documents (Dec. 19, 2017), available at www.fanniemae.com. Mortgage loan originations are examined in NCLC’s Mortgage Lending.

California Mortgages: California remedies for failure to record satisfaction of a mortgage for home equity lines of credit are due to sunset. Cal. Civ. Code § 2943.1 (West).

Mississippi Debt Relief Agencies: Mississippi’s statute regulating debt relief agencies, Miss. Code Ann. § 81-22, is due to sunset. For more on debt relief agencies, see NCLC’s Federal Deception Law Chapter 10.

Nevada Telemarketing: Nevada’s telemarketing statute, Nev. Rev. Stat. § 599b.015, et seq., is due to sunset. For more on federal and state telemarketing regulation, see NCLC’s Federal Deception Law Chapter 5.

New York Small Loans: Creditors’ ability to charge in New York for open-end small loans an annual fee of $50 or 1% of the loan amount is due to sunset. N.Y. Banking Law § 351(6)(a) (McKinney).

August 19, 2019 Effective Date

Consumer Financial Protection Bureau Payday Loan Rule. The CFPB’s Payday, Vehicle Title, and Certain High Cost Installment Loans Rule (known as the “Payday Loan Rule”) has an effective date of August 19, 2019. Nevertheless, in November 2018, a federal court in the Western District of Texas ordered a stay of the rule’s effective date. The CFPB had represented to the court that it intended in January 2019 to issue a proposed rule that would reconsider the rule and address the August 19, 2019 compliance date. The CFPB in October 2018, indicated that it will revisit provisions requiring lenders to assess borrowers’ ability to repay before making loans, but would not reconsider provisions that apply to lenders’ withdrawing loan payments from consumers’ bank accounts. Existing regulation of payday, auto title, and installment loans are examined at NCLC’s Consumer Credit Regulation Chapter 9, Chapter 10, and Chapter 12.

September 10, 2019 Effective Date

New York usury limits: N.Y. Banking Law § 12-a, providing parity for state chartered banking institutions with federal depositories, is set to expire and will be deemed repealed. For more on state parity laws, see NCLC’s Consumer Credit Regulation § 3.6.

November 24, 2019 Effective Date

SAFE Mortgage Licensing Act: Public Law No. 115-174 § 106 amends the SAFE Mortgage Licensing Act, by loosening licensing, registration, and similar requirements on loan originators. Originators that meet specified requirements can continue temporarily to originate loans under their old authority after moving from a depository institution to a non-depository institution or from one state to another. The new Act also widens the conduct by state officials and officers of the Nationwide Mortgage Licensing System and Registry that is immune from monetary liability. For more on the SAFE Act, see NCLC’s Mortgage Lending § 3.3.

December 1, 2019 Effective Date

Bankruptcy Rules and Forms: Bankruptcy rules and forms are amended each year with a December 1 effective date. The changes that are scheduled for December 2019 apply to Rule 4001 (excluding chapter 13 from provision relating to obtaining credit), Rule 6007 (changing the motion to request the trustee to abandon or dispose of property), Rule 9036 (electronic notice and service), and Rule 9037 (redacting filings failing to protect privacy). Bankruptcy forms changes are also likely. See Committee on Rule of Practice and Procedure of the Judicial Conference, Summary of Proposed Amendments to the Federal Rules (Oct. 24, 2018), available at www.uscourts.gov. The Bankruptcy Rules are reprinted in NCLC’s Consumer Bankruptcy Law and Practice Appendix B.

Telephone Lifeline Subsidies: The federal Lifeline Program provides support for low-income Americans who would otherwise find telephones or broadband to be unaffordable. Monthly lifeline support for mobile or landline voice is lowered from $9.25 to $7.25 while broadband support stays at $9.25. See 47 C.F.R. § 54.403. See also NCLC’s Access to Utility Service § 11.3.3.

December 31, 2019 Effective Date

California Tenant Protections: A California statute is due to sunset that allows tenants to stay in their residences through the term of their leases, even where their landlord is subject to foreclosure. See Cal. Civ. Proc. Code § 1161b (West 2013). Also due to be sunset is a California requirement that the foreclosure trustee post and mail a notice of trustee sale addressed to the occupant at least twenty days before a scheduled foreclosure sale. Cal. Civ. Code § 2924.8 (West 2014). Rights of tenants when a landlord is subject to foreclosure, including new federal requirements, are discussed in a NCLC’s new Home Foreclosures treatise (forthcoming February 2019).