Like most industries today, consumer finance services businesses are being significantly impacted by the novel coronavirus (COVID-19). Troutman Sanders and Pepper Hamilton have developed a dedicated COVID-19 Resource Center to guide clients through this unprecedented global health challenge. We regularly update this site with COVID-19-related news and developments, recommendations from leading health organizations, and tools that businesses can use free of charge. Additionally, this Thursday at 4:00 p.m. EDT, Troutman Sanders will host a webinar to discuss credit reporting in light of COVID-19. Click here to register for the webinar.
To help you keep abreast of relevant activities, below is a breakdown of some of the biggest COVID-19-driven events at the federal and state levels to impact the consumer finance services industry this past week:
– On April 1, the Consumer Financial Protection Bureau issued “a non-binding general” policy statement regarding the Fair Credit Reporting Act and Regulation V in light of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The policy statement primarily emphasizes:
- The need for furnishers to follow the reporting requirements of the CARES Act regarding certain COVID-19-impacted loans; and
- The CFPB’s intent to provide regulatory relief regarding the FCRA’s statutory investigation timeframe.
– On March 31, the CFPB published an online guide for consumers seeking financial relief options for mortgage and rent payments in light of COVID-19, with a particular focus on the CARES Act. The guide offers a consumer-friendly explanation of the relevant provisions, focusing on: (1) what major mortgage relief options are available, (2) who qualifies, (3) how to obtain relief, and (4) what to do upon receiving relief. Click here for more analysis. Additionally, the CFPB issued a “video on how struggling homeowners can obtain mortgage forbearance if their finances are impacted due to the COVID-19 pandemic.”
– On April 1, the United States Department of Housing and Urban Development (HUD) instructed mortgage servicers to offer forbearance in accordance with the CARES Act. The announcement provides additional guidance regarding Home Equity Conversion Mortgages and credit reporting.
– On April 1, HUD issued a mortgagee letter regarding the “[Federal Housing Administration]’s Loss Mitigation Options for Single Family Borrowers Affected by the Presidentially-Declared COVID-19 National Emergency in Accordance with the CARES Act.”
– On March 31, the Federal Housing Finance Agency announced several loan processing flexibilities from Fannie Mae and Freddie Mac designed to help their customers, including:
- Allowing desktop appraisals on new construction loans;
- Allowing flexibility on demonstrating construction has been completed (alternative to the completion report);
- Allowing flexibility for borrowers to provide documentation (rather than requiring an inspection) to allow renovation disbursements (draws); and
- Expanding the use of power of attorney and remote online notarizations.
– The Federal Trade Commission and the Federal Communications Commission sent joint letters “to three companies providing Voice over Internet Protocol (VoIP) services, warning them that routing and transmitting illegal robocalls, including Coronavirus-related scam calls, is illegal and may lead to federal law enforcement against them.”
– The FTC issued a press release on March 31 entitled, “Data Shows Jump in Coronavirus-related Complaints from Consumers.”
– Financial services providers are asking the FCC to issue a declaratory ruling stating that calls to consumers placed by financial institutions and related to COVID-19 fall within the “emergency purposes” section of the Telephone Consumer Protection Act. Click here for more analysis.
– 36 states have now issued orders closing non-essential or non-life sustaining business operations. All of the remaining states have issued some sort of restrictions on the operations of businesses. Consumer financial services businesses should look closely at these orders to ensure their operations remain compliant. Click here to access the COVID-19 Resource Center which maintains an up-to-date map showing the states with business restriction orders in place.
-Within the past week, states have taken additional actions to clarify the impact of the existing business restrictions, issue new related orders, or restrict certain business activities. These actions include:
- Hawaii’s Division of Financial Institutions issuing guidance allowing licensed companies “with physical locations in the State of Hawaii to reduce office hours or temporarily close offices during” the State’s “Emergency Period.”
- Illinois’s Department of Financial and Professional Regulation issuing a statement providing guidance to licensed debt collectors and debt buyers relaxing statutory guidelines which mandate that collection actions only take place at their registered addresses. Click here for more analysis.
- Massachusetts Attorney General issuing a Frequently Asked Questions document for emergency regulation 940 CMR 35.00. Some of the topics addressed include the definition of debt collector and communications by debt collectors and creditors.
- Montana Governor issuing an order placing limitations on evictions and foreclosures.
- North Carolina Insurance Commissioner publishing a Frequently Asked Questions document clarifying its order, amended order, and bulletin issued over the past week that requires debt collection agencies to give North Carolina consumers the option of deferring debt payments for a period of 30 days from the due date of payment.
- Ohio Governor issuing an executive order requesting that lenders provide commercial real estate borrowers with a 90-day forbearance.
- Pennsylvania Attorney General launching the “PA CARE Package” to provide consumers additional relief during COVID-19.
- Texas’s Joint Financial Regulatory Agencies issuing guidance on emergency measures for home equity lenders regarding COVID-19.
- Utah Governor issuing a moratorium on residential evictions for certain tenants impacted by COVID-19.
- Washington Governor and the state’s Department of Financial Institutions announcing a moratorium on evictions and guidance to companies servicing mortgages to urge “them to work with homeowners adversely impacted by COVID-19, including payment forbearance for those who need it.”
– Numerous states also have taken steps to facilitate or provide guidance regarding the use of online notarization:
- Arkansas executive order suspends provisions requiring in-person witnessing and notarizing requirements.
- California issues COVID-19 FAQ, including guidance regarding notary public.
- Georgia Governor issues executive order which authorizes electronic notarization.
- Montana issues guidance regarding technology-based notarization.
- Nebraska Governor issues executive order accelerating online notary access.
- Oklahoma issues remote online notary information.
- West Virginia “Issues Emergency Rule Establishing Electronic Notarization Processes in Lieu of In-Person Notary Requirements.”
- Wisconsin authorizes remote online notarization due to COVID-19.
– New York Assembly Member Félix Ortiz has introduced a bill that would freeze various forms of consumer debt and obligations for 90 days, including student loans, mortgages, auto loans, credit card payments, and utility payments.
– The Receivables Management Association International (RMAI) reached out for clarification regarding Nevada’s Department of Business & Industry (DBI) notice that collection agencies were non-essential businesses subject to the closures announced by the Governor’s emergency directive. The DBI provided an email response to the RMAI which suggests that accepting consumer-initiated communications/payments does not violate the DBI’s order for licensed out-of-state collectors to “cease collection efforts.”
– In response to the Massachusetts Attorney General issuing emergency regulation 940 CMR 35.00 instituting a prohibition on debt collectors making outbound debt collection calls or pursuing other debt collection practices as a result of COVID-19, the Association of Credit and Collection Professionals launched a “Grassroots Campaign” to have the order rescinded.
– Federal regulators continue to issue privacy and information security guidance to businesses affected by COVID-19. New guidance includes:
- On April 3, the Financial Crimes Enforcement Network issued “Further Information to Financial Institutions in Response to the Coronavirus Disease 2019 (COVID-19) Pandemic.”
- On April 3, the FTC and FCC warned businesses against “routing and transmitting illegal robocalls, including Coronavirus related scam[s].”
- On April 2, the Office of Civil Rights at the United States Department of Health and Human Services announced it would not impose certain penalties for violations of certain provisions of the Health Insurance Portability and Accountability Act Privacy Rule.
– The International Association of Privacy Professionals (IAPP) continues to issue guidance to businesses affected by COVID-19, including:
- On April 3, the IAPP published Troutman Sanders’s template: “Request for Assurance from Critical Vendors of Operational Preparedness to Address COVID-19,” which is “designed to assist in drafting a customer letter to critical service providers and suppliers regarding disruptions resulting from […] the COVID-19 outbreak.”
The IAPP issued a Data Protection Authorities resource guide, providing links to information relating to data processing and COVID-19. The guide includes information from the United States, European Union, and other countries.