Like most industries today, Consumer Financial Services businesses are being significantly impacted by the novel coronavirus (COVID-19). Troutman Pepper has 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:
- On July 17, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it issued a Compliance Assistance Statement of Terms Template (CAST Template) under its Compliance Assistance Sandbox (CAS) Policy to Build Commonwealth, Inc (Commonwealth). Employers interested in creating an automatic savings program as a way for employees to build emergency savings and increase their financial resiliency would be able to use the CAST Template as the basis for an application. Under these programs, employees would be able to build emergency savings by directing a portion of their earnings to an existing account at a financial institution of their choice. For more information, click here.
- On July 17, 2020, the Federal Reserve Board modified the Main Street Lending Program to provide greater access to credit for nonprofit organizations such as educational institutions, hospitals, and social service organizations. The Federal Reserve Board approved two new loan options to provide support to a broad set of nonprofit organizations that were in sound financial condition prior to the pandemic. The Main Street nonprofit loan terms mirror those for Main Street for-profit business loans, including the interest rate, principal and interest payment deferral, five-year term, and minimum and maximum loan sizes. For more information, click here.
- On July 16, 2020, the CFPB issued an updated Complaint Bulletin, analyzing more than 8,000 complaints it received from January through May 2020 that mention COVID-19 or related terms. The bulletin shows that “mortgage,” “credit card,” and “credit or consumer reporting” concerns top the list of complaints the CFPB has received. For more information, click here.
- On July 15, 2020, the Federal Reserve Board announced an extension of a rule change to bolster the effectiveness of the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). The extension will temporarily modify the noard’s rules so that certain bank directors and shareholders can apply to their banks for PPP loans for their small businesses. The SBA has prohibited banks from favoring a PPP loan application from a director or equity holder. The rule is effective immediately and will be in place while the PPP is active. For more information, click here.
- On July 13, 2020, the U.S. Department of Labor announced the award of one Dislocated Worker Grant (DWG) totaling $3 million to help address the workforce-related impacts of the COVID-19 public health emergency. This award is funded under the Coronavirus Aid, Relief and Economic Security (CARES) Act, which provided $345 million for DWGs to prevent, prepare for and respond to COVID-19. For more information, click here.
- On June 30, 2020, Fannie Mae updated its “COVID-19 Frequently Asked Questions” as part of an ongoing effort to provide guidance to lenders and servicers in connection with the COVID-19 national emergency. For more information, click here.
State and City Activities:
- On July 17, 2020, Oakland extended an eviction moratorium through September 30, 2020. The rule prevents landlords from evicting a tenant who failed to pay rent between March 24 and September 30. Tenants have a year to pay back rent from the time it was due. For more information, click here.
- On July 17, 2020, New York Attorney General Letitia James extended the suspension of debt collection for medical and student debt owed to the state of New York for 30 days, through August 15, 2020. Interest accrual and collection of fees on outstanding state medical and student debt are suspended until August 15 as well. For more information, click here.
- On July 7, 2020, Pennsylvania Attorney General Josh Shapiro announced that his office has shut down price gouging efforts at Paoli Pharmacy after receiving tips alleging that the store was selling N95 masks in Ziploc bags for as much as $25 per mask. As COVID-19 endures, state attorneys general have been inundated with complaints of price gouging and illegal profiteering on highly sought-after and necessary products. For more information, click here.
- On July 7, 2020, Chicago Mayor Lori E. Lightfoot announced that the city of Chicago had lifted a temporary suspension on debt collection practices and non-safety-related citations and impounds, as well as penalties for late payments. The order pertains only to a debt owed to the city of Chicago. For more information, click here.
- On July 6, 2020, New York state courts in the 4th and 8th Judicial Districts were added to the list of districts cleared to operate at Phase 4 of the state’s economic reopening plan. Earlier on July 1, 2020, the 5th, 6th, and 7th Judicial Districts entered Phase 4 of the plan. Courts in the 3rd and 9th Districts, and the 10th District on Long Island, continue to operate at Phase 3 of the state’s reopening plan and await approval for the transition into Phase 4. For more information, click here.
- On July 1, 2020, Delaware Governor John Carney modified an order pertaining to the Declaration of a State of Emergency issued on March 12, 2020. The order is effective immediately, and it addresses a number of issues that impact residential mortgage loan servicers, including restrictions on residential foreclosure and evictions and certain fees or charges. For more information, click here.
Privacy and Cybersecurity Activities:
- On July 17, 2020, the Payment Card Industry Security Standards Council (PCI SSC) issued a statement revising the implementation date for Security Requirement 18-3 (i.e., Key Block structure management) due to the impact COVID-19 has had on implementations. While Phase 1 implementations became effective on June 1, 2019, Phase 2’s effective date has been modified to January 1, 2023 (changed from June 1, 2021). Phase 3’s effective date has been modified to January 1, 2025 (changed from June 1, 2023). To review the full statement, click here.
- On July 16, 2020, the U.S. National Security Agency and other intelligence groups released a joint cybersecurity advisory to “expose the malicious activity by [Russian Intelligence Services]” targeting COVID-19 research and vaccine development. The advisory provides system administrators with a variety of tools and information they can use to review and mitigate potential security risks by this government actor. For the full advisory, click here.
- On July 15, 2020, the U.S. Department & Human Services (HHS) clarified its recent rule change requiring hospitals to report COVID-19 patient information to its central database. Reports were made earlier in the week that the rule change essentially meant that hospitals reporting COVID-19 patient information would indicate the Centers for Disease Control and Prevention (CDC) would be bypassed—likely limiting access to public health data for researchers and reporters. HHS’s June 15 statement clarifies that the rule change does not take “access or data away from the CDC” and is meant only to streamline the collection and dissemination of data as rapidly as possible. The full announcement can be found here.
- During the week of July 13, 2020, the Federal Trade Commission (FTC) released several resources aimed toward assisting consumers in avoiding COVID-19 related scams.
- On July 17, the FTC shared general tips for avoiding COVID-19 scams. The advice can be found here.
- On July 16, the FTC shared information for those having trouble paying credit card bills, and included information meant to avoid credit card scams. Click here to read more.
- On July 16, the FTC posted tips for avoiding cryptocurrency scams, likely referring to a recent incident involving a large social media company and high-profile individuals. Click here to read more.
- On July 13, the FTC launched a new online tool for exploring military consumer data. The tool includes information relating to COVID-19 scams and unwanted telemarketing. Click here to read the full announcement.
- On July 14, the FTC warned consumers not to submit payment to scammers acting as utility companies. The warning includes tips for consumers receiving such calls; click here to read more.