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:
Privacy and Cybersecurity Activities
- On June 25, 2020, S. Senators Margaret Wood Hassan (D. N.H.) and Thomas R. Carper (D. Del.) sent joint letters to the Department of Justice, the Federal Communications Commission, the Internal Revenue Service and the Federal Trade Commission urging combined action to address COVID-19 related scam calls. The letters also included specific questions regarding the scam and any subsequent investigations.
- On June 25, 2020, the Federal Reserve Board (the Board) released the results of its stress tests for 2020 and additional sensitivity analyses that the Board conducted in light of the COVID-19 emergency. The Board conducted a sensitivity analysis to assess the resiliency of large banks under three hypothetical recessions, or downside scenarios, which could result from the COVID-19 event. For more information, click here.
- On June 23, 2020, the U.S. Department of Labor launched an online resource to help workers determine if they qualify for paid sick leave or extended family and medical leave to cover time away from work for reasons related to the COVID-19 emergency. The tool guides workers through a series of questions to help them determine if the paid leave provisions of the Families First Coronavirus Response Act (FFCRA) apply to their employer. For more information, click here.
- On June 23, 2020, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule (IFR) intended to make it easier for consumers to transition out of COVID-19-related financial hardship and easier for mortgage services to assist those consumers. The IFR will become effective on July 1, 2020. For more information, click here.
- On June 23, 2020, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Conference of State Bank Supervisors issued examiner guidance to promote consistency and flexibility in the supervision and examination of financial institutions affected by the COVID-19 pandemic. For more information, click here.
- On June 17, 2020, the CFPB issued an updated blog post on managing consumer debt during the COVID-19 emergency. The blog post includes programs and other way in which consumers can temporarily delay payments and avoid interest charges. For more information, click here.
- On June 3, 2020, the CFPB issued a statement relaxing the requirements for some electronic disclosures given for requests by consumers made via telephone for credit card plans. The CFPB’s recent statement acknowledged that credit card issuers are receiving more calls and may have limited staffing due to the pandemic. Many institutions are asking for relief from certain written disclosures in accordance with Regulation Z. For more information, click here.
- On June 1, 2020, the Criminal Division of the Department of Justice issued new guidance on how it evaluates corporate compliance programs when making corporate charging decisions. The additional guidance provides valuable insight into best practices for companies updating their corporate compliance programs and paints a clear picture of the DOJ’s expectations regarding those programs. For more information, click here.
- As a result of the COVID-19 pandemic, small businesses may apply for the Coronavirus Aid, Relief, and Economic Security Act’s (CARES Act) Paycheck Protection Program (PPP). The PPP is available through the Small Business Administration (SBA) authorized lenders and other lenders that the SBA has determined to be eligible. The SBA is now warning that some companies have falsely claimed an affiliation with the SBA or approved PPP lenders, or have represented untruthfully that people can get PPP or other SBA loans by applying on their sites. The Federal Trade Commission and SBA sent warning letters to six more companies on June 22, 2020, directing them to remove any deceptive or misleading statements. For more information, click here.
- Colorado Governor Jared Polis is expected to sign a new bill which will limit certain debt collection actions until November 1, 2020 to support consumers that experienced a COVID-19 financial hardship. This bill will take effect on the day that it is signed. For more information, click here.
- On June 26, 2020, the California State Senate approved a bill that would mandate that debt collectors and collection agencies require licenses in order to operate. The bill would also prohibit certain collection practices, such as placing a telephone call without disclosing the caller’s identity, expensing long distance telephone calls, and using obscene or profane language. For more information, click here.
- On June 22, 2020, the Supreme Court of Virginia issued an order allowing eviction proceedings to resume on June 29, 2020. The moratorium on evictions was initially issued in March and was extended earlier this month in response to the COVID-19 pandemic. For more information, click here.
- On June 19, 2020, the Connecticut Department of Banking extended its No Action Position Regarding Temporarily Working from Home (“no-action memo”) through August 31, 2020 due to the COVID-19 pandemic. The Department’s no-action memo temporarily allows Consumer Credit Licensees to work from home without registering their residential address as a licensed branch location. For more information, click here.
Privacy and Cybersecurity Activities:
- On June 25, 2020, the FTC warned the public that “some scammers are pretending to be contact tracers so they can profit off of the [COVID-19] confusion.” Scammers are trying to steal the identity and money of unsuspecting individuals. The FTC shared four ways individuals can discern the difference between legitimate contact tracers and scammers—click here to read more. Please stay tuned for an upcoming post discussing the FTC’s warning from Troutman Sanders, soon to be Troutman Pepper, by visiting here after July 1, 2020.
- On June 25, 2020, the state of California released tools, technology, and data to assist in the fight against COVID-19. One of these tools includes the California COVID Assessment Tool (CalCAT). CalCAT contains “assessments of the spread of COVID-19, short-term forecasts of disease trends, and scenarios of the course of the disease from modeling groups across the country.” The source code is made public, and California’s Governor, Gavin Newsom, calls on all state agencies “to make COVID-19 data and information publicly accessible, provided it does not include information that will violate privacy.” To read the full announcement, click here.
- On June 24, 2020, the California Secretary of State released a memorandum stating that the California Privacy Rights Act (tCPRA), also known as the CCPA 2.0, passed the threshold of signatures to be on the November ballot for California’s General Election. This proposed legislation will have vast implications for organizations fighting against the effects of COVID-19. To learn more about the specifics of the CPRA, read Troutman Sanders’s article here. For more information in general, click here.
- As of the week of June 22, 2020, several states continued to roll out reopening phases. Reports, however, are coming in that local officials are struggling to implement contact tracing programs to support reopening efforts. For local officials hoping to leverage technology for contact tracing, many programs are reportedly “buggy, little-used or not ready for major rollouts.” The race for contact tracing applications is in full swing. For a discussion of best practices that makers of contact tracing apps should consider, see Troutman Sanders’s article here.
On June 22, 2020, the CDC updated its “Contact Tracing Frequently Asked Questions and Answers” section. Click here to review the updates.