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, Your Definitive Guide to Credit Reporting During the Time of COVID-19, on Tuesday, June 30, 2020, at 1:00 p.m. ET. We will cover guidance from the Consumer Data Industry Association and very recent new guidance from the Consumer Financial Protection Bureau. We will also discuss challenges faced by furnishers arising from the impact of the economic downturn. For more information, 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:

  • On June 19, 2020, the U.S. Small Business Administration (SBA) and the U.S. Department of the Treasury agreed with the U.S. Senate Small Business Committee to make public additional data regarding the Paycheck Protection Program (PPP). This agreement will ensure that the interests of both transparency and protections for small businesses are served. For more information, click here.
  • On June 16, 2020, the Consumer Financial Protection Bureau (CFPB) issued a seven-page FAQ memorandum addressing some of the most critical questions for compliance with the consumer reporting requirements imposed by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). In sum, this Compliance Aid:
    • Addresses the specific credit reporting requirements of the CARES Act, including considerations for furnishers when reporting consumers as “current” on open accounts;
    • Clarifies that reporting a consumer is affected by a natural or declared disaster, by itself, does not meet the CARES Act consumer reporting requirements. The CFPB explains that furnishers are required to appropriately report all data fields if an account is deemed current pursuant to the CARES Act; and
    • Addresses the CFPB’s guidance that provides temporary and targeted flexibility in the event consumer reporting agencies (CRAs) or furnishers experience challenges investigating consumer disputes within the statutory timeframes as a result of the pandemic. The CFPB made clear that it expects CRAs and furnishers to make good faith efforts to investigate disputes as quickly as possible.

For more information, click here.

  • On June 15, 2020, the Federal Reserve Board announced it will be seeking public feedback on a proposal to expand its Main Street Lending Program, in light of the COVID-19 pandemic, to provide access to credit for nonprofit organizations. The existing Main Street Lending Program targets small and medium-sized businesses. The proposed expansion would offer loans to small and medium-sized nonprofits that were in sound financial condition before the COVID-19 emergency and could benefit from additional liquidity to weather this challenging period. For more information, click here.
  • On June 11, 2020, the Federal Trade Commission published a report containing more state-level information about the complaints it receives from consumers related to COVID-19, with reports about online shopping problems topping the list of complaints in most states. For more information, click here.

State Activities:

  • On June 19, 2020, the Connecticut Department of Banking extended its no-action memo through August 31, 2020, due to the COVID-19 pandemic. The no-action memo relates to the requirement that any Connecticut licensable activity by a Consumer Credit Licensee be conducted from a licensed branch office location. For more information, click here.
  • On June 18, 2020, the Washington Collection Agency Board held a meeting to consider a rule change that would provide additional clarification to the definition of “branch offices” and “remote work duties.” Additionally, the Board passed a motion to begin the formal rulemaking process. The Board also adopted an emergency rule that allows employees of collection agencies to work remotely for 120 days. For more information, click here.
  • On June 18, 2020, the Washington State Department of Financial Institutions issued amended guidance to state regulated residential mortgage loan servicers. The amended guidance is effective until September 30, 2020, and urges mortgage services to refrain from credit reporting and forbearing mortgage payments. For more information, click here.
  • On June 16, 2020, New York Attorney General Letitia James and Governor Andrew M. Cuomo announced that the New York Office of the Attorney General was renewing an order that suspended the collection of medical and student debt referred to its office. This renewal extends the original order for 30 days, or until July 16, 2020. The policy also suspends the accrual of interest for those accounts. For more information, click here.
  • On June 15, 2020, the California State Assembly narrowly failed to pass a bill, “COVID-19: Homeowner, Tenant, and Consumer Relief” AB-2501. This bill would have offered major payment relief to homeowners and certain renters, as well as owners of mobile homes. It might see new life when the State Assembly reconvenes on July 13, 2020, but the chances of another vote are unclear at this time. For more information, click here and here
  • The New York City Department of Consumer and Worker Protection (DCWP) is adding new rules that require debt collectors to inform consumers about whether certain language access services are available and to retain records relating to language access services. Although the DCWP has not officially announced it, the DCWP has agreed to delay enforcement of its new language access rule for 60 days after it goes into effect on June 27, 2020. For more information, click here.

Privacy and Cybersecurity Activities:

  • On June 16, 2020, the Federal Trade Commission (FTC) announced its annual PrivacyCon event would take place online due to the ongoing COVID-19 pandemic. The FTC also announced the event will focus on the “privacy of health data collected, stored, and transmitted by mobile applications[.]” To read the full announcement, click here. For those interested in attending this year’s PrivacyCon, click here.
  • As states begin to reopen, businesses are tasked with maintaining operations while keeping their workforce safe against COVID-19. One way businesses aim to achieve this is by collecting health-related information from their employees. Collecting this type of personal information triggers employment and privacy law considerations, which businesses should not ignore. To learn more about potential privacy concerns, click here.

On June 16, 2020, several state Attorneys General, including California’s, wrote to Google LLC and Apple Inc. expressing privacy concerns regarding the increasing use of contact tracing applications within their platforms. The attorneys general “urged the companies to ensure that only legitimate public health apps are available for download” and not apps that may “sell ads or monetize consumers’ data without adequately safeguarding consumers’ personal information in compliance [with local laws].” To read the full announcement, click here. For a discussion of best practices that makers of contact-tracing apps should consider, see Troutman Sanders’ article here.