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 news and developments, recommendations from leading health organizations, and tools that businesses can use free of charge.

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:

Federal Activities

State Activities

Privacy and Cybersecurity Activities

Federal Activities:

  • Troutman Sanders and Pepper Hamilton have collaborated to produce a series of podcasts to discuss litigation topics that have been brought to the forefront by the COVID-19 pandemic and how businesses might be able to prepare and respond. In this episode, Troutman Sanders partners Ashley Taylor and Chris Browning join Pepper Hamilton partners Tambry Bradford, Mike Hino and Justin Weber as they focus on regulatory takings and executive power to seize property during the COVID-19 crisis, concentrating on business closure orders and other orders of state and local governments. For the full podcast, click here.
  • On April 27, the National Credit Union Association (“NCUA”) issued an interim final rule updating several existing regulations (12 C.F.R. Parts 702 and 723) to conform to changes made by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) Paycheck Protection Program (“PPP”). Specifically, the interim final rule amends the definitions of “low-risk assets” and “total assets” for purposes of calculating risk–based net worth requirements for certain credit unions. The interim final rule also clarifies the definition of “commercial loan” for purposes of determining member business loan and commercial lending requirements. For more information, click here.
  • Several financial service providers filed a petition with the Federal Communications Commission asking for clarification on the Telephone Consumer Protection Act’s (TCPA) emergency purposes exception in the context of the COVID-19. The comment period on that petition closed in March, with a further reply date of May 21, 2020. This follows the FCC’s Declaratory Ruling which confirmed that the COVID-19 pandemic qualifies as an “emergency” under the TCPA, although limiting the types of calls that qualify under the exception. For more information, click here.
  • On May 5, the U.S. Small Business Administration (SBA) issued FAQ 43 extending the safe harbor deadline to return PPP funds from May 7, 2020 until May 14, 2020. FAQ 43 reminds borrowers that they were required to certify on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Prior SBA guidance provided that any borrower who applied for a PPP loan prior to April 24, 2020 and repaid the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.
  • On May 6, Judge Richard Stearns of the United States District Court for the District of Massachusetts entered a temporary restraining order enjoining Massachusetts’ Attorney General from enforcing Section 35.04, which bans telephonic communications initiated by debt collectors and Section 35.03 insofar as it bars debt collectors from bringing enforcement actions in the state and federal courts of Massachusetts, finding a likelihood of success that the prohibitions violate the First Amendment. For more information, click here.

State Activities:

  • The status of the Louisiana Public Service Commission’s potential enforcement of the available emergency measures pursuant to the Do Not Call General Order has been unclear. While these emergency measures generally have been imposed during prior emergencies, they presently remain unimplemented despite Governor John Bel Edwards’ initial Public Health Emergency Declaration and subsequent State of Emergency Declaration extending COVID-19 emergency measures. For more information, click here.
  • The Oregon Department of Consumer and Business Services Division of Financial Regulation issued new guidance to all Oregon-regulated collection agencies and debt buyers. The division encourages its regulated debt buyers and collection agencies to take active measures to provide help to debtors affected by the COVID-19 pandemic. For more information, click here.
  • Minnesota Governor Tim Walz issued an executive order exempting stimulus payments from garnishment and suspending provisions of Minnesota statutes relating to collections, notably those relating to garnishments. For more information, click here.
  • Iowa Governor Kim Reynolds extended the State of Public Health Disaster Emergency in response to the ongoing state of the COVID-19 pandemic and issued the FAQ Regarding Suspension of Garnishments, which clarified that the intent of the April 24, 2020, proclamation was to stop new garnishments, but not impact garnishments that were already underway. For more information, click here.
  • Maryland Governor Larry Hogan signed an executive order prohibiting the garnishment of federal stimulus checks given out through the CARES Act due to the COVID-19 pandemic. The order does not apply to garnishment relating to child support payments. For more information, click here.
  • In response to the COVID-19 public health emergency, New York State expanded its court system to include “virtual” court operations. To resolve any ambiguity as to how and when digital documents may be used in a virtual court environment, the Chief Judge initiated a new program to allow for the transmission of digitized documents. For more information, click here.

Privacy and Cybersecurity Activities:

  • On April 30, a group of Senators announced their plan to introduce the “COVID-19 Consumer Data Protection Act” (the “Act”). The Act would cover the collection and use of personal geolocation, health, and proximity data, and provide measures to hold businesses accountable to consumers if they misappropriate personal data to fight the COVID-19 pandemic. For more information, click here.
  • On May 4, 2020, New York Governor Cuomo issued guidelines for when regions within the state can open. One of the guidelines provides that a contact tracing capacity baseline of at least “30 contact tracers for every 100,000 residents, and additional tracers based on the projected number of cases in the region.” To read more, click here.
  • On May 5, 2020, the Office for Civil Rights (“OCR”) at the U.S. Department of Health and Human Services (“HHS”) issued guidance relating to the Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule. OCR reminds providers that the Privacy Rule requires them to obtain HIPAA authorization from each patient before giving the media access to that personal health information. Learn more here.
  • On May 5, 2020, a coalition of states, including California, sent a letter to Centers for Medicare & Medicaid Services (“CMS”) requesting action to increase transparency from nursing homes. The states urge that nursing homes should provide data to federal public health institutions on the presence of COVID-19.
  • On May 5, 2020, the Cybersecurity and Infrastructure Security Agency (“CISA”) issued warnings for key healthcare organizations operating in the U.S. and U.K. The two nations “exposed malicious cyber campaigns targeting organizations involved in the coronavirus response[.]” To read the full warning, click here.
  • On May 6, 2020, CISA and the Idaho National Laboratory launched a new tool aimed at assisting the “trucking industry operate effectively and efficiently and prepare for emergency situations[,]” such as COVID-19. The app incorporates coordinated data streams and routing options for the trucking industry. To learn more, read here.
  • On May 7, 2020, the U.S. Equal Employment Opportunity Commission announced it would delay data collections from employers in different sectors, due to COVID-19. To learn more, see the full notice here.