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.

Please join us for a Complimentary Webinar, “Hot Topics for Calling in the Time of COVID-19,” on Wednesday, May 20, 2020 at 3:00 p.m. EDT. This webinar will cover the landmark decisions rendered by the Second, Seventh, and Eleventh Circuits in the past five months, constitutional TCPA questions pending before the United States Supreme Court, and other key case decisions. To sign up, click here.

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:

  • The Office of the Inspector General (OIG) of the Small Business Administration (SBA) issued a report summarizing its review of the SBA’s implementation of the Paycheck Protection Program (PPP). The PPP provides guaranteed loans to certain businesses, individuals, and organizations as a lifeline in the wake of the COVID-19 pandemic and outlines provisions for lending and forgiveness of these loans. In its report, the OIG concluded that although the SBA’s interim rules for implementing the PPP are “mostly aligned” with key provisions of Section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which created the program, the SBA’s administration of the PPP has fallen short in four key areas: Prioritizing underserved and rural markets; Loan proceeds eligible for forgiveness; Guidance on loan deferments; and Registration of loans. For more information, click here.
  • The proposed Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act) would impose a moratorium on debt collection for debts owed by consumers, small businesses and nonprofits while the COVID-19 national emergency declaration is in effect and for 120 days after the declaration is terminated. It would also require collectors to enroll certain consumers in forbearance programs, open a liquidity facility to extend low interest rate loans to compensate collectors for losses incurred due to forbearance programs, and restrict reporting certain information during the crisis. It would subject Economic Impact Payments made under the CARES Act to the existing federal rules governing garnishment of federal benefits, and it would purport to the toll the statute of limitations for collection activity. For more information, click here.
  • The United States Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) have issued over 100 warning letters to companies making allegedly unsupported claims that their products or therapies can prevent, treat, or cure COVID-19. The FTC announced it issued 45 new warning letters, in addition to three previous sets, to companies “making unsubstantiated claims that their products and therapies can treat or prevent COVID-19.” For more information, click here.
  • Fannie Mae and Freddie Mac extended their suspensions on mortgage foreclosures through at least June 30, 2020 as U.S. homeowners continue to be hit hard by lost jobs and income amid the COVID-19 pandemic. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The current moratorium was set to expire on May 17th. For more information, click here.
  • A group of Senate Democrats introduced a bill that would impose a moratorium on the collection of all medical debts nationwide until a vaccine for COVID-19 is “widely available to the public.” For more information, click here.

State Activities:

  • The Wisconsin Supreme Court rejected Governor Tony Ever’s extension of the stay-at-home order. The stay-at-home order prohibited most travel and operations of nonessential businesses until May 26. As a result, the Wisconsin Courts COVID-19 Task Force issued its final report, which includes a framework to guide state courts in reopening facilities and returning to in-person proceedings. For more information, click here.
  • Twenty-four state attorneys general led by Massachusetts Attorney General Maura Healey called for action from Congress, urging House of Representative and Senate leaders to come together to resolve the mounting issues with the PPP. Against the backdrop of a record 33 million Americans filing for unemployment and daily news that small businesses have struggled to obtain the funds that the PPP was designed to provide them, these attorneys general highlighted their concerns about ongoing implementation of the PPP and the national economic crisis that the COVID-19 pandemic has caused. For more information, click here.
  • The Texas Supreme Court issued updated emergency orders that lift a temporary ban on evictions, debt collection lawsuits, and garnishments. Proceedings for evictions and debt collection activity in the state can now resume according to the orders. For more information, click here.
  • Evictions and foreclosures across South Carolina resumed on May 15, 2020. In March, Chief Justice Donald Beatty put a hold on evictions and foreclosures until May. For more information, click here.
  • New York Governor Andrew Cuomo extended the moratorium on late fees, evictions, and foreclosures until August 20, 2020, so long as the nonpayment of mortgage is “someone that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic.” For more information, click here.
  • Florida Governor Ron DeSantis extended the suspension on evictions and foreclosures through June 2, 2020. The original executive order banning those suspensions during the COVID-19 pandemic was set to expire in May. For more information, click here.
  • The Minnesota Commerce Department issued guidance for debt collectors working from home. According to the new guidance, the department will not act against any licensee who allows their individual registered collectors to temporarily work from home as a precautionary measure. For more information, click here.
  • The Nevada Financial Institutions Division (NFID) issued guidance to licensees regarding the extension of debt collection prohibitions in the state until May 30, 2020. The NFID has clarified that the directive “applies to any collections involving Nevada residents. The agencies should contact each state regulator to ensure compliance in each state.” For more information, click here.

Privacy and Cybersecurity Activities:

On May 13, 2020, the Federal Bureau of Investigation (FBI) and the Cybersecurity and Infrastructure Security Agency (CISA) issued a warning to organizations researching possible COVID-19 treatment options. Government-sponsored cyber actors have been observed attempting to identify and obtain intellectual property related to vaccines, treatments, and testing from COVID-19 research. For more information, click here.