Minnesota Peacetime Emergency Ends July 1st

July 1, 2021

Governor Walz has agreed to end the peacetime emergency on July 1st. He had planned for his executive orders to expire on August 1st. However, in negotiations with Senate Republicans, he agreed to end his emergency powers tomorrow. Two of his executive orders have a direct impact on banking:

1. Garnishments and Levies Executive Order Expires July 1st

Executive Order 21-02 generally prohibits garnishments and levies against consumer debtors for judgments entered after May 4th, 2020. It also protects stimulus payments from garnishment, levy and setoff. When the executive order expires today, the processing of garnishments and levies should go back to normal.

2. Foreclosures and Evictions

The situation with foreclosures and evictions is more complicated. Minnesota Executive Order 20-79 on foreclosures and evictions does not prohibit foreclosures; it requests that lenders not foreclose.

The legislature wanted an “off-ramp” from the eviction prohibition rather than an abrupt end to the executive order, giving renters and those in foreclosure more time in their homes. The legislature’s Housing Omnibus bill was signed into law by Governor Walz on June 29th. The new law revokes Executive Order 20-79 and provides a period of time of 105 days during which evictions from foreclosed homes continue to be prohibited. Exceptions include where the occupant seriously endangers the safety of others or significantly damages property. Lenders on foreclosed properties are generally not able to remove occupants until October 12, 2021.

Other Foreclosure Considerations

The Biden Administration recently extended the federal foreclosure moratoria on federally-backed mortgages through July 31, 2021.

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