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:
Privacy and Cybersecurity Activities
- On July 7, 2020, the Federal Reserve Board’s Vice Chair for Supervision and Chair of the Financial Stability Board, Randal K. Quarles, issued a statement regarding post COVID-19 crisis financial reforms. For more information, click here.
- On July 2, 2020, the U.S. Department of the Treasury announced that American Airlines, Frontier Airlines, Hawaiian Airlines, Sky West Airlines, and Spirit Airlines have signed letters of intent setting out the terms on which a loan would be extended under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act authorizes the Treasury Department to make loans to eligible businesses for losses incurred as a result of the COVID-19 pandemic. For more information, click here.
- On July 1, 2020, the Federal Deposit Insurance Corporation and the Federal Reserve Board provided information to the eight largest and most complex banking organizations that will guide their next resolution plans, which are due by July 1, 2021. Each resolution plan must describe the firm’s strategy for rapid and orderly bankruptcy proceedings in the event of material financial distress or failure of the firm. Additionally, resolution plans will be required to include core elements, such as capital, liquidity, and recapitalization strategies, as well as how each banking organization has integrated changes to and lessons learned from its response to the COVID-19 emergency. For more information, click here.
- On July 7, 2020, Chicago Mayor Lori E. Lightfoot announced that the city 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 June 30, 2020, Nevada Governor Steve Sisolak lifted the state’s temporary “stay” on garnishments through July 31, 2020. In its initial emergency directives, Nevada included collection agencies in the non-essential business categories. For more information, click here.
- On June 29, 2020, Colorado Governor Jared Polis signed a bill that establishes a moratorium through November 1, 2020, on “extraordinary” collection activities, which is defined as an action in the nature of a garnishment, attachment, levy, or execution to collect or enforce a judgment on a debt as defined under the state’s Fair Debt Collection Practices Act. For more information, click here.
- The California state legislature is debating a bill that would revise the definition of an automated telephone dialing system, and give consumers additional power to revoke consent to be contacted beyond the restrictions that currently exist in the Telephone Consumer Protection Act. The new bill defines “automatic dialing-announcing devices” as equipment that stores and automatically calls or sends text messages to phone numbers without significant human involvement in the act of calling or sending the prerecorded voice messages or prewritten text messages. The bill would also repeal the authorization for using these devices to make calls to consumers for which an established business relationship exists. For more information, click here.
Privacy and Cybersecurity Activities:
- On July 10, 2020, the Federal Trade Commission (FTC) shared guidance for small business owners to help better protect critical assets against common scams and cyber-attacks. This guidance is of particular importance for small businesses that may have recently been forced to depend on reaching customers through virtual means. Check out the FTC’s post here. Also, be sure to check out the cybersecurity videos referenced in the post, which can be found here.
- On July 6, 2020, the Federal Bureau of Investigation (FBI) announced that it has seen a spike in fraudulent unemployment insurance claims related to the COVID-19 pandemic, using stolen personally identifiable information (PII) of individuals from various states. The personal information is thought to have been obtained through the use of information from “online purchase of stolen PII, previous data breaches, computer intrusions, [and] cold-calling victims while using impersonation accounts[.]” The FBI advises the public to be on the lookout for:
- Communications regarding unemployment insurance forms when you have not applied for unemployment benefits
- Unauthorized transactions on your bank or credit statements related to unemployment benefits
- Any fees involved in filing or qualifying for unemployment insurance
- Unsolicited inquires related to unemployment benefits
- Fictitious websites and social media pages that are mimicking those of government agencies.
To read the full statement, click here.
- The FTC recently released the agenda for its annual PrivacyCon event, which will take place online due to the ongoing COVID-19 pandemic. The FTC announced the event would focus on the “privacy of health data collected, stored, and transmitted by mobile applications[.]” PrivacyCon will be organized into six sessions:
- Session 1: Health Apps;
- Session 2: Bias in AI Algorithms;
- Session 3: The Internet of Things;
- Session 4: Specific Technologies: Camera/Smart Speakers/Apps;
- Session 5: International Privacy; and
- Session 6: Miscellaneous Privacy/Security.
To view the full agenda, click here. For those interested in attending this year’s PrivacyCon, click here.