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.
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 August 12, 2020, the Consumer Financial Protection Bureau published Frequently Asked Questions (FAQs) and answers pertaining to compliance with the Payday Lending Rule. The FAQs explain what types of loans are covered, payment transfers, and payment notices. For more information, click here.
- On August 11, 2020, the Federal Reserve Board announced revised pricing for its Municipal Liquidity Facility (MLF). The revised pricing reduces the interest rate spread on tax-exempt notes for each credit rating category by 50 basis points, and reduces the amount by which the interest rate for taxable notes is adjusted relative to tax-exempt notes. The revised pricing will ensure the MLF continues to provide an effective backstop to assist U.S. states and local governments as they weather the COVID-19 pandemic. For more information, click here.
- On August 11, 2020, the U.S. Department of the Treasury released the report of the Federal Interagency Task Force on Long-Term Care Insurance (Task Force). The report, titled Long-Term Care Insurance: Recommendations for Improvement of Regulation, describes the work conducted by the Task Force and presents recommendations to reform the regulation of long-term care insurance in the United States. For more information, click here.
- On August 8, 2020, President Donald Trump signed a number of executive orders related to the COVID-19 pandemic, including one that will defer payments on all student loans held by the Department of Education and waive all interest until December 31, 2020. The other executive orders pertain to deferring payroll tax obligations, evictions, and unemployment insurance. For more information, click here.
- On August 12, 2020, the Idaho Department of Finance extended its guidance allowing collection agency employees to work from home without needing to obtain branch licenses until December 31, 2020. The allowance was due to expire on September 1, 2020. For more information, click here.
- On August 13, 2020, SB 908, which would require debt collectors in California to obtain licenses in order to stay in business, was approved by the Assembly Banking and Finance Committee. The bill has already been approved by the state Senate. It now moves to the Assembly’s Appropriations committee for consideration. For more information, click here.
Privacy and Cybersecurity Activities:
- On August 13, 2020, the Attorney General for Massachusetts, Maura Healey, announced the creation of a new division called the Data Privacy and Security Division. The division is tasked with protecting consumers’ data. The division “will build on our office’s commitment to empowering Massachusetts consumers in the digital economy, ensuring that companies are protecting personal data, and promoting equal and open access to the internet.” The division is likely going to handle many of the new health privacy developments posed by COVID-19. To read the full announcement, click here.
- On August 13, 2020, the New York State Department of Labor announced that it has interrupted several criminal attempts relating to fraudulent unemployment claims during the pandemic. The Department of Labor announced it “has prevented more than $1 billion from falling into fraudsters’ hands during the coronavirus pandemic, identifying and stopping more than 42,200 fraudulent unemployment benefit claims since mid-March.” The press release states that more cases have been referred “to federal prosecutors than the department did in the last ten years combined.” Due to this uptick, the Department of Financial Services released a public service announcement, which can be viewed here. To read the full press release, click here.
- On August 12, 2020, the U.S. Department of Health and Human Services (HHS) issued a “Notice of Funding Opportunity to expand and accelerate innovative uses of electronic health information via health information exchanges (HIEs)[.]” This issuance aims to support state and local public health agencies. The goal is to strengthen “health data exchange and use between HIEs” and other agencies. To read more about this announcement, click here.
- On August 12, 2020, the Federal Trade Commission (FTC) warned consumers strapped for cash not to believe claims that they “won” a prize, but must make a small payment to claim their reward. Scammers are in full swing, and the FTC provides a few tips to avoid being scammed:
- Legitimate sweepstakes don’t make you pay a fee to get your prize.
- Don’t send money transfers or gift cards, or give personal information.
- Don’t trust your caller ID.Click here to read the full post.
- On August 10, 2020, the FTC warned consumers that scammers are targeting individuals looking to invest their money in “rotating savings” clubs. During these trying times, scammers promise consumers that their investments will increase in value for every new individual they have to join, in what appears to be a type of pyramid scheme. To read the full post, click here.