Good morning,

I hope and trust that you were able to find some peace and respite over the weekend, and you continue to remain healthy and safe.  Since Friday morning, New York State Governor Andrew Cuomo has issued two more executive orders that suspended or modified certain laws, ordinances, rules and regulations to deal with the COVID-19 crisis.

Executive Order 202.8

Executive Order 202.8, signed on March 20, 2020, provides clarity to Governor Cuomo’s previous Executive Orders (Executive Order 202.6, as modified by Executive Order 202.7) that mandated all non-essential employees work from home.  This Executive Order set Sunday, March 22, 2020 at 8 pm. as the effective date and time for non-essential businesses and entities to implement the reduction of in-person workforce by 100%.  Executive Order 202.8 also notes that an entity providing essential services or functions, whether to an essential business or a non-essential business, shall not be subjected to the in-person work restriction but may operate at a level necessary to provide such services or functions.

Consequences to Violating Workforce Reduction Order Now Spelled Out

More significantly, Executive Order 202.8 sets out the enforcement mechanism for the workforce reduction provisions previously ordered by Governor Cuomo.  Executive Order 202.8 provides that a violation of the 100% in-person workforce reduction shall be subject to enforcement as if it was a violation of an order pursuant to section 12 of the New York State Public Health Law.  A violation of Public Health Law section 12 currently carries a civil penalty of up to $2,000 for a first violation with increasing fines on a sliding scale up to $10,000, depending on the nature and frequency of the violation.  It is important to note that due to a change in the statutory framework that was in place before the COVID-19 pandemic, section 12’s sliding scale of fines above $2,000 is set to expire on April 1, 2020.  Unless the law is amended or modified, a fine for a Public Health Law section 12 violation shall be limited to $2,000 per violation starting on April 1, 2020.

In addition to the fines, the utilization of Public Health Law section 12 gives New York State both civil and criminal remedies against those businesses and entities that violate the 100% in-person workforce reduction provision in Executive Order 202.8.  This provision of the Public Health Law also empowers Attorney General Tish James to obtain injunctive relief, and the law states that it is meant to provide remedies that are “additional and cumulative” to any other available remedies.  Thus, it is possible that other New York municipalities, such as a county or city, may therefore impose their own enforcement laws against non-conforming businesses and entities.

Executive Order Suspends Certain Laws and Provides New Directives

Finally, Executive Order 202.8 sets out more actions to address the COVID-19 emergency.  This Executive Order:

  • suspends all state statutes of limitation for “any specific time limit for the commencement, filing, or service of any legal action, notice, motion or other process or proceeding,” under any state law, act, statute, local law, ordinance, order, rule or regulation, through April 19, 2020;
  • imposes a 90-day moratorium of an eviction of any residential or commercial tenant or a foreclosure of any residential or commercial property throughout New York State;
  • suspends certain provisions of New York’s Vehicle and Traffic Law so as to extend the validity and expiration of driver’s license, non-driver identification card or automobile registration that expired on or after March 1, 2020, and any temporary registration documents issued by car dealers, for the duration of the Executive Order;
  • permits only on-line transactions at any state or county department of motor vehicles and cancels all in-person appointments at such department;
  • suspends subsection (a) of Section 602 and subsections (a) and (b) of section 605 of New York’s Business Corporation Law to the extent the provisions require meetings of shareholders to be noticed and held at a physical location; and
  • expands the Commissioner of Taxation and Finance’s authority to abate interest, for a period of 60 days, for a taxpayer who is required to file returns and remit sales and use taxes due March 20, 2020, for the sales tax quarterly period that ended February 29, 2020.

Executive Order 202.9

On Saturday, March 20, 2020, Governor Cuomo signed Executive Order 202.9 which formerly puts into place Governor Cuomo’s earlier pronouncements that banks would provide 90-day mortgage payment relief to consumers and that there would be limitations on certain banking fees, such as ATM fees, overdraft fees and credit card fees.

Mortgage Forbearance Now Mandated, Rules to Follow

Executive Order 202.9 specifically directs the Superintendent of New York State’s Department of Financial Services (“DFS”) to ensure that under reasonable and prudent circumstances, licensed or regulated entities provide an opportunity for a forbearance of mortgage payments to any person or entity facing financial hardship as a result of the COVID-19 pandemic.  The Superintendent will promulgate emergency regulations to require that the application for this mortgage be made widely available for consumers and be “granted in all reasonable such prudent circumstances solely for the period of such emergency.”  Executive Order 202.9 gives some teeth to the forbearance directive by providing that a bank’s failure to grant a 90 day forbearance to any person or business who has a financial hardship due to the COVID-19 crisis constitutes an unsafe and unsound business practice under New York Banking Law 39(2).  By categorizing such action as a “unsafe and unsound business practice,” DFS is permitted to exercise its rights under Banking Law 39(2) to issue an order requiring the violating financial institution to cease the unsafe and unsound business practice (i.e. the bank’s decision not to grant such forbearance) and fix a time when the offending entity can voluntarily appear before DFS to explain why it denied the forbearance.

Rules to Direct Suspension or Modification of Certain Bank Fees to Be Drafted

Executive Order 202.9 also empowers the DFS Superintendent to promulgate emergency regulations that would direct the modification or suspension of ATM fees, overdraft fees and credit card late fees.  The suspension or modification of such fees will be done in accordance with the DFS’s regulation of the licensed or regulated entities and will take into account applicable federal requirements, the financial impact of the New York consumer and the safety and soundness of the licensed or regulated entity.

Long Point Advisors will continue to update you on events as they unfold.  Again, if you wish to be removed from my email list, please let us know.

Stay safe!