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:
- We are pleased to announce that Troutman Sanders partner David Anthony will present during the Litigation Section of the American Bar Association’s webinar, “Consumer Financial Protection Challenges Amid COVID-19,” on June 3, 2020 at 2:00 pm EDT. For additional information and registration, please visit ABA’s website.
- The Democrats on the House Financial Services Committee are pushing their proposed package of bills aimed at responding to the COVID-19 pandemic. This time around, they are supporting the bill that would place a moratorium on debt collection activities for the duration of the pandemic. For more information, click here.
- U.S. Small Business Administration (“SBA”), in consultation with the U.S. Treasury Department, announced that it is setting aside $10 billion of Round 2 funding for the Paycheck Protection Program (“PPP”) to be lent exclusively by Community Development Financial Institutions (“CDFIs”). CDFIs work to expand economic opportunity in low-income communities by providing access to financial products and services for local residents and businesses. For more information, click here.
- The SBA PPP, which provides $659 billion in loans to small businesses, nonprofits, sole proprietors and other eligible entities with fewer than 500 employees, released the Loan Forgiveness Application that borrowers will be required to submit to determine how much, if any, of their PPP loan will be forgiven. Additionally, the SBA issued its Interim Final Rules on Loan Forgiveness, which provides additional guidance on loan forgiveness. For more information, click here.
- Chair of the Federal Reserve Jerome Powell has indicated that the proposed Main Street Loan Programs may be operational in the next few weeks. The Main Street Loan Programs are expected to provide up to $600 billion of financial support through emergency lending to small and mid-sized businesses adversely impacted by the COVID-19 pandemic. These Programs will consist of three distinct facilities: (i) the Main Street New Loan Facility, (ii) Main Street Priority Loan Facility, and (iii) Main Street Expanded Loan Facility. For more information, click here.
- Last week, a new bipartisan bill was announced in the Senate to amend the Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”). The proposed legislation would provide exemptions from garnishment by private creditors for federal stimulus payments made to qualifying Americans. Congress apparently overlooked the issue when it passed the $2.2 trillion relief package in late March, which carved out prohibitions against offsetting debts owed to federal and state agencies but failed to exempt the same federal funds from court-ordered garnishments to pay creditors. The proposed bill has received widespread support from a collection of financial institutions and consumer advocacy groups, which recently issued a joint statement commending Senate efforts to clarify the issue and urged lawmakers to move quickly to pass the proposed legislation.
- Iowa Governor Kim Reynolds signed a new proclamation continuing the COVID-19 Public Health Emergency until June 25, 2020, but lifting a moratorium on evictions, foreclosures, and certain debt collection activities effective May 28. For more information, click here.
- Nevada’s Financial Institutions Division extended its directive that prohibited collection agencies in the state from attempting to collect from Nevada residents for another 30 days. For more information, click here.
- Connecticut’s Department of Banking announced it would continue to allow consumer collection agencies to operate unlicensed branch offices for employees who temporarily work from home during the COVID-19 outbreak. For more information, click here.
- New York State is making New York Forward Loan Fund and additional SBA loans available for New York based businesses as they continue to navigate through the COVID-19 economy. For more information, click here.
- Idaho’s Department of Finance issued guidance to licensees regarding the licensure requirements for home offices. The department granted an extension of its March 12, 2020, work from home guidance allowing licensed collection agencies to maintain home offices for employees without obtaining an Idaho branch license or registration for the location. The Temporary Regulatory Guidance now extends to September 1, 2020. For more information, click here.
- The North Carolina debt deferral program that has been in place for the past two months expired on May 27, 2020 and it has not been renewed by the state’s Department of Insurance, thereby ending the program. The order from Insurance Commissioner Mike Causey was extended on April 26 for an additional 30 days, but the department has not appeared to issue any guidance indicating that the order would be extended for a third month. For more information, click here.
- Cybercriminals are leveraging the pandemic for their commercial gain, and we have already seen several businesses fall victim to these types of attacks, including businesses in the health care and legal industry. If your business finds itself in a similar position, or if you are among the businesses already planning, there are certain questions you should consider. For more information, click here.
- As COVID-19 testing increases across the country, state health departments have been implementing contact tracing to contain viral spread. Contact tracing identifies and monitors individuals who have come into contact with others who have tested positive for COVID-19. Typically, contact tracers work with infected individuals to obtain the contact information for everyone with whom they recently came into contact. For more information, click here. For additional guidance for contact tracers from the Centers for Disease Control and Prevention, click here.
- The California Consumer Privacy Act (“CCPA”), which took effect on January 1, 2020, and is scheduled to be enforced by the California Attorney General starting July 1, 2020, was the hot topic of conversation before COVID-19. While COVID-19 has impacted governments, businesses, and even many federal and state statutes and regulations, the CCPA appears to be immune. For an in-depth discussion of the status of the CCPA, including issues relating to enforcement and implementing r