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.

Our bank and loan servicing clients also face novel challenges affecting their industry due to COVID-19, particularly the ever-changing rules and regulations concerning evictions and foreclosures. We are closely tracking these updates and have assembled an interactive tracker containing state orders and guidance documents regarding residential foreclosure and eviction moratoriums. You may access this interactive tool at https://covid19.troutman.com/.

To help you keep abreast of relevant activities, below find 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 March 25, the Federal Reserve Board announced that the temporary and additional restrictions on bank holding company dividends and share repurchases currently in place would end for most firms after June 30, after completion of the current round of stress tests. Firms with capital levels above those required by the stress test will no longer be subject to the additional restrictions as of that date. Firms with capital levels below those required by the stress test will remain subject to the restrictions. For more information, click here.
  • On March 25, Senators Chris Van Hollen and Sherrod Brown, along with Representative Chuy Garcia, announced legislation to repeal the Office of the Comptroller of the Currency’s True Lender Rule through the use of the Congressional Review Act. The rule states that the bank that makes a loan is the “true lender” in the context of a relationship between a bank and a third party. A bank that makes the loan is the true lender, if, as of the day the loan is originated, it is named as the lender in the loan agreement or it funds the loan. For more information, click here.
  • On March 24, the Consumer Financial Protection Bureau (CFPB) provided Congress its Consumer Response Annual Report for 2020. The reports showed an increase in consumer complaints, with the CFPB handling approximately 542,300 complaints last year — a nearly 54% increase over the approximately 352,400 complaints it handled in 2019. For more information, click here.
  • On March 23, Representatives Steve Cohen, Suzanne Bonamici, and Alexandria Ocasio-Cortez introduced the Fair Debt Collection Improvement Act that would prohibit debt collectors from collecting or attempting to collect debt from consumers after a statute of limitation expires. For more information, click here.
  • On March 22, the CFPB released the 2020 annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA). The report focuses on consumers financially impacted by the COVID-19 pandemic. For more information, click here.

State Activities:

  • On March 24, Iowa Governor Kim Reynolds announced that COVID-19-impacted renters and homeowners can apply for assistance with rent and mortgage payments starting on March 29 at 2 p.m. The Iowa Finance Authority will handle the congressionally-funded ($195 million) programs, which will provide “rent and/or utility assistance for a total of up to 12 months.” For more information, click here.
  • On March 24, the Nevada Senate Committee on Labor and Commerce held a hearing on a bill that would regulate apps offering consumers early access to wages. Specifically, the bill included a requirement that the Nevada Financial Institutions Division license the app. For more information, click here.
  • On March 23, Illinois Governor J.B. Pritzker signed Senate Bill 1792 (Illinois Predatory Loan Prevention Act) into law. Modeled after the Military Lending Act, the bill caps interest rates at 36% on consumer loans, making it the eighteenth state to impose a 36% interest rate cap. For more information, click here.
  • On March 22, Washington D.C. Mayor Muriel Bowser extended the district’s state of emergency through May 20. As such, initiating communication with a debtor is prohibited while the emergency remains in effect and for 60 days thereafter. As a result, the communications prohibition will now last through July 19. For more information, click here.
  • On March 19, the Maryland Senate and House of Representatives each voted unanimously to approve their own versions of a bill that would impact how medical debts are collected. Specifically, hospitals would be prohibited from charging interest or fees on certain debts and from garnishing the wages of individuals who qualify for reduced or free medical care. Moreover, hospitals must offer payment plans to patients who do not exceed 5% of their income. For more information on the House of Representatives’ version of the bill, click here. For more information on the Senate’s version of the bill, click here.

Privacy and Cybersecurity Activities:

  • On March 25, the Federal Trade Commission (FTC) released its 2020 annual highlights showing the public how the agency stayed busy responding to the COVID-19 pandemic. The announcement describes how the agency launched a new website to allow consumers with the ability to “report scams, frauds, and bad business practices[.]” The FTC also highlighted its response against those who tried to exploit the pandemic against consumers when it took action to:
    • halt false and deceptive claims related to supposed treatments for COVID-19;
    • sue companies that lured consumers into income scams; and
    • inform consumers about COVID-19 scams by publishing hundreds of posts.

To view the FTC’s 2020 highlights, click here.

  • On March 25, Wired reported that bad actors are cashing in on COVID-19 vaccination listings on the dark web. The report describes that “researchers have seen a spike in listings on dark web marketplaces[,] advertising everything from vaccine doses to falsified vaccine certifications and negative test results. [C]ertificates are becoming passports of sorts, allowing people to a freedom of movement they haven’t enjoyed in months.” To read Wired’s report, click here. To learn more about companies’ efforts to verify test results and vaccination status, read Troutman Pepper’s Law360 article by clicking here.
  • On March 24, the FTC urged consumers to “ignore bogus COVID vaccines survey[s].” Scammers are using this new trick to “steal [consumer] money and personal information” not only by asking them to complete a survey to get a free reward, but also by asking consumers to pay for “shipping fees.” The FTC reminds consumers they should not:
    • click on any links or open attachments from unexpected emails or texts;
    • call or use the number offered to call an unknown company; or
    • provide financial information to suspicious entities and individuals.

To report suspected scams, click here. To read the full announcement, click here.

  • On March 24, it was reported that New York’s COVID-19 vaccine passport application raises “troubling privacy questions.” Reporters question “how exactly the app works behind the scenes or why New Yorkers should trust this software with their sensitive health information.” An executive at the Surveillance Technology Oversight Project said that New Yorkers have not had the opportunity to review a privacy policy of how the application will process users’ personal information. To read the full report, click here. To learn more about companies’ efforts to verify test results and vaccination status, read Troutman Pepper’s Law360 article by clicking here.
  • On March 24, INTERPOL and U.S. Homeland Security Investigations warned the public against “purchasing COVID-19 vaccines and treatments online.” Enforcement agencies are witnessing an emerging trend where “cybercriminals set up illicit websites claiming to be legitimate national and/or world organizations offering pre-orders for vaccines against the [virus].” The websites are suspected of “being used to conduct phishing attacks[.]” To read the full warning, click here.