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 closely track these updates and have assembled an interactive tracker containing state orders and guidance documents regarding residential foreclosure and eviction moratoriums.
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:
Privacy and Cybersecurity Activities
- On April 8, U.S. Representative Carolyn Maloney introduced the Student Loan Forgiveness for Frontline Health Workers Act — a new bill seeking to cancel any outstanding student loan debt for frontline health care workers. Rep. Maloney previously introduced this bill in May 2020, seeking to forgive any federal or private student loans for any frontline health care workers, which included doctors, nurses, lab workers conducting coronavirus tests, emergency medical services workers, medical or nursing students, and researchers conducting research related to COVID-19. For more information, click here.
- On April 7, the Consumer Financial Protection Bureau (CFPB) proposed extending the effective date of two recent debt collection rules to give affected parties more time to comply due to the ongoing COVID-19 pandemic. The first debt collection rule focuses on the use of communications related to debt collection, and clarifies prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt. The second debt collection rule clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications. The rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency. For more information, click here.
- On April 5, the CFPB proposed a set of rule changes to help prevent foreclosures as the emergency federal foreclosure protections expire. The CFPB’s proposal recognizes that the expected surge of borrowers exiting forbearance in the fall will put mortgage servicers under strain. For more information, click here.
- On April 1, U.S. Representatives Suzanne Bonamici and Marie Newman introduced the Ceasing Undeserved Relief Benefits for Debt Collectors Act to help prohibit predatory debt collectors from collecting additional funds from the Paycheck Protection Program (PPP). Specifically, this bill would prevent debt collectors that have committed violations of the Fair Debt Collection Practices Act from accessing PPP funds to pay off forgivable loans. For more information, click here.
- On April 8, Maryland’s Senate and House passed SB 514 and HB 565, medical debt collection bills to be presented to Governor Hogan for signature. The bills will prohibit hospitals from charging interest or fees on certain debts for certain patients, and they require the Health Services Cost Review Commission to develop guidelines for income-based payment plans. For more information click here and here.
- On April 7, the Texas Justice Court Training Center issued guidance regarding the eviction moratorium set by the Centers for Disease Control and Prevention (CDC). While the CDC extended the eviction moratorium until June 30, the Texas Supreme Court’s 34th emergency order — which applied the provisions of the moratorium to Texas courts — expired on March 31. The guidance indicates that Texas judges should not enforce the CDC’s order. For more information, click here.
- On April 6, New Mexico Governor Michelle Grisham signed SB 71 — a medical debt collection bill — into law. SB 71 provides a private right of action for patients and precludes health care providers from placing certain low-income patients’ accounts into collection or filing suit on those accounts. For more information, click here.
- On April 1, the Illinois Department of Financial & Professional Regulation issued a frequently-asked-questions document covering Illinois’ recently enacted Predatory Loan Prevention Act (PLPA). These questions address the effective date of the PLPA, the scope of the interest rate cap, and which entities the PLPA exempts. For more information, click here.
- On March 31, Idaho’s Department of Finance issued its fourth supplementary extension of temporary guidance regarding working from home due to COVID-19. Under this extension, individual employees of licensees are permitted to work remotely until December 31 — provided they comply with protocols issued in the original guidelines. For more information, click here.
- On March 30, the California Department of Financial Protection and Innovation announced that it entered into a consent order that permanently barred James Jacob Berry and any company he owns or controls from seeking future enrollment as a Property Assessed Clean Energy (PACE) financing solicitor’s agent or PACE solicitor, after finding that Berry and his three companies misled consumers by marketing their product as a “no-cost” government-funded program. For more information, click here.
Privacy and Cybersecurity Activities:
- On April 9, The Wall Street Journal quoted Troutman Pepper Partner Ron Raether, who discussed the use of COVID-19 vaccination passports. Raether shared that, “[t]here’s going to be different [vaccine] verification standards[;] there’s too much economic pressure to jump start all of these struggling economies.” It appears the Biden administration would agree with the statement; Reuters reported the administration is discussing the possibility of providing airlines guidance for the use of vaccine passports in hopes that it will “ramp up international air travel safely.” While the Biden administration previously stated it would not require businesses to use COVID-19 health applications, it will nonetheless publish usage guidance “that provides important answers to questions that Americans have, in particular around concerns about privacy, security, or discrimination, soon.” However, others don’t agree. The New York Times reports that some politicians are debating whether schools and businesses should be able to require proof of vaccination, with Texas issuing “an executive order barring state agencies and private entities receiving funds from the state from requiring proof of vaccination.” To learn more about efforts and compliance issues about the verification of test results and vaccination status, read Troutman Pepper’s Law360 article by clicking here.
- On April 9, the Federal Trade Commission (FTC) offered individuals tips on avoiding job scams. While many Americans suffered devastating job losses, the FTC reminds jobseekers to be aware that scammers are targeting them via online or print ads, especially work-from-home jobs. The FTC shares that individuals should:
- Never respond to ads guaranteeing you’ll get a job;
- Avoid work-at-home ads guaranteeing you’ll make big money;
- Never pay to get a job;
- Don’t bank on a “cleared” check;
- Don’t believe ads for “previously undisclosed” federal government jobs;
- Research potential employers; and
- Find legitimate job listings by visiting state sources.
To read more, click here.
- On April 7, the FTC shared ways to avoid payment scams, especially as the pandemic created financial problems for many people. When consumers are:
- Asked to pay with gift cards? The FTC reminds consumers that “gift cards are the most common form of payment people use when losing money to scammers [because] scammers often pose as legitimate companies, the government, or someone you know.”
- Asked to pay with digital money or cryptocurrency? The FTC states that cryptocurrency payments are difficult to trace back and often cannot be reversed.
- Asked to pay by money transfer? The FTC reminds consumers that sending money “through money transfer companies [is] a lot like sending cash. Once you send it, it’s gone.”
To read the full announcement, click here.