Like most industries today, Consumer Finance 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.

Please join us for a complimentary webinar on Wednesday, August 26, 2020 at 2:00 p.m. ET. An invitation will be sent to you.

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 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 U.S. Department of the Treasury announced that it intends to make a $700 million loan to YRC Worldwide Inc. (YRC), and that it had reached an agreement with YRC on June 30, 2020, to receive a 29.6% equity stake in the company in connection with the CARES Act loan. 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 1, 2020, the Federal Reserve Board released proposed term sheets to expand the Main Street Lending Program to nonprofit entities that were in sound financial condition before the onset of the COVID-19 pandemic. Loans under the Nonprofit Organization New Loan Facility start at $250,000 and are capped at the lesser of $35 million or the nonprofit’s average 2019 quarterly revenue. Loans under the Nonprofit Organization Expanded Loan Facility start at $10 million and are capped at the lesser of $300 million or the nonprofit’s average 2019 quarterly revenue. Under both facilities, the loans have a term of five years, with principal payments deferred for the first two years and interest payments deferred for the first year of the loan. For more information, click here.
  • On July 1, 2020, the Federal Trade Commission (FTC) released data showing that since the beginning of the COVID-19 pandemic, consumers have complained to the FTC in record numbers about problems related to online shopping. The FTC’s latest Consumer Protection Data Spotlight shows that in April and May of 2020, the FTC received more than 34,000 complaints from consumers related to online shopping. More than 18,000 of those complaints related to items that were ordered but never delivered. The most common items reportedly not delivered were facemasks, with other reports including sanitizer, toilet paper, thermometers, and gloves as not received. The FTC directs consumers and businesses to their online portal to learn how to avoid such online scams; also, check out the FTC’s blog post to learn more. To read the full announcement, click here.
  • On July 1, 2020, the FTC released the final agenda for a July 13, 2020, virtual workshop that will seek input on proposed changes to the Gramm-Leach-Bliley Act’s Safeguards Rule, which requires financial institutions to develop, implement, and maintain a comprehensive information security program. For information, click here.
  • On June 29, 2020, the Department of the Treasury and Internal Revenue Service encouraged taxpayers to file their taxes by July 15, or file for an automatic extension of time for October 15. Due to COVID-19, the original tax filing and payment deadline for 2019 was postponed from April 15 to July 15. For more information, click here.

State Activities:

  • On June 29, 2020, Colorado Governor Jared Polis signed a new bill that will limit certain debt collection actions until November 1, 2020, in an effort to support consumers that experienced a COVID-19 financial hardship. This bill, effective immediately, impacts all bank levies and some garnishments. For more information, click here.
  • On June 30, 2020, Nevada Governor Steve Sisolak lifted the state’s temporary “stay” on garnishments, effective on June 30 at 11:59 p.m. In its initial emergency directives, Nevada included collection agencies in the non-essential business categories. For more information, click here.
  • On June 26, 2020, California’s State Senate approved a bill that would mandate the licensing of debt collectors and collection agencies operating within the state. 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.

Privacy and Cybersecurity Activities:

  • On July 2, 2020, the Federal Trade Commission (“FTC”) released the agenda for its annual PrivacyCon event, which would take place online due to the ongoing COVID-19 pandemic. The FTC also 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.

  • On July 1, 2020, the California Attorney General Xavier Becerra issued a statement on the first day of enforcing the California Consumer Privacy Act (CCPA)–despite calls by businesses to delay enforcement due to the COVID-19 pandemic. Attorney General Becerra encouraged every Californian “to know their rights to internet privacy and every business to know its responsibilities.” This statement coincides with the announcement made the day prior: reminding Californians of their rights under the CCPA, discussing how consumers may exercise their CCPA rights, and highlighting the businesses that may be subject to these new requirements. Also, check out Troutman Pepper’s post discussing the CCPA’s enforcement by clicking here.
  • On June 30, 2020, the FTC settled with alleged scammers that it was sending full refunds to people who lost money to a spam email scheme, aimed to “lure consumers into buying work-from-home services.” Following the settlement, the FTC released guidance, including a video, to prepare the public in identifying future scams related to work-at-home services. To read the full June 30 announcement, click here.

On June 30, 2020, the FTC reminded the public to be aware of scammers pretending to be government officials and claiming to make COVID-19 payments. The FTC warns the public that the FTC will “never contact you by phone, email, text message, or social media to ask for your financial information.” To read the full announcement, click here.