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 June 25, the Federal Reserve Board announced that it will extend its Paycheck Protection Program Liquidity Facility (PPPLF) by an additional month to July 30. The extension serves as an operational accommodation, allowing additional processing time for banks, community development financial institutions, and other financial institutions to pledge any Small Business Administration-approved Paycheck Protection Program (PPP) loans to the facility through the PPP program’s June 30 expiration date. For more information, click here.
- On June 25, U.S. Senators Chris Murphy, Chris Van Hollen, Tammy Baldwin, Cory Booker, Elizabeth Warren, and Richard Blumenthal wrote to the Consumer Financial Protection Bureau (CFPB), requesting that it prohibit the reporting of medical debt collection tradelines to credit bureaus, which would further limit the number of communication attempts beyond what is included in Regulation F. For more information, click here.
- On June 24, the Centers for Disease Control and Prevention (CDC) announced that it would extend the eviction moratorium through July 31. The moratorium, which prevents the eviction of tenants unable to make rental payments, was scheduled to expire on June 30. For more information, click here.
- On June 24, the President Joe Biden announced his intent to nominate current CFPB Acting Director Dave Uejio as an assistant secretary at the Department of Housing and Urban Development. If confirmed by the Senate, Uejio would replace 2017 Trump appointee Anna Maria Farias. For more information, click here.
- On June 24, the Federal Reserve Board released the results of its annual bank stress tests, which showed that large banks continue to have strong capital levels and could continue lending to households and businesses during a severe recession. For more information, click here.
- On June 24, the U.S. Department of the Treasury released guidance in the form of updated frequently asked questions (FAQs) and fact sheet to continue supporting the rapid deployment of emergency rental assistance by states, territories, localities, and tribal governments. The FAQs build on prior actions to provide state and local governments with the tools necessary to deliver relief to renters in need by helping grantees with implementation and best practices. For more information, click here.
- On June 23, the Federal Reserve announced that it would continue its Fed Listens initiative in 2021 to learn from a broad range of individuals, households, and communities about the economic recovery from the COVID-19 pandemic. For more information, click here.
- On June 23, President Joe Biden removed Trump appointed Federal Housing Finance Agency Chief Mark Calabria. This removal was made pursuant to the June 23 Supreme Court ruling in Collins v. Yellen, where the Court ruled that the president has authority to dismiss the agency’s director. For more information, click here.
- On June 23, U.S. Senators Elizabeth Warren, Tina Smith, Sherrod Brown, and Edward Markey wrote a letter to President Joe Biden, signed by 60 other lawmakers, requesting that that he extend the pause of federal student loan payments for at least six months or whenever employment returns to pre-pandemic levels. For more information, click here.
- On June 22, Congresswoman Ayanna Pressley, Congressman Jimmy Gomez, and Congresswoman Cori Bush, along with 41 other lawmakers, wrote a letter to President Joe Biden and CDC Director Rochelle Walensky, urging them to extend and strengthen the federal CDC eviction moratorium. For more information, click here.
- On June 22, the Federal Reserve Board announced that it will extend the comment period for its proposed changes to Regulation II (Debit Card Interchange Fees and Routing) until August 11. The proposed changes would clarify that debit card issuers should enable and allow merchants to choose from at least two unaffiliated networks for card-not-present debit card transactions, such as online purchases. For more information, click here.
- On June 16, the CFPB issued an interpretive rule that explains the basis for its authority to examine supervised financial institutions for risks to active duty servicemembers and their dependents (i.e., military borrowers) from conduct that violates the Military Lending Act (MLA). For more information, click here.
- On July 1, Nevada Senate Bill 248 will go into effect. The new law limits a collection agency’s ability to collect on medical debt. The proposed amendments include changing the definition of medical debt, allowing medical debtors to initiate contact and make voluntary payments, and preventing certain written communications from being sent via certified mail. Questions regarding the new law and answers provided by the Financial Institutions Division of the Nevada Department of Business and Industry can be found here. For more information on the new law, click here.
- On June 25, multiple collection agencies and other plaintiffs filed suit in the U.S. District Court for the District of Nevada against Nevada Financial Institutions Division Commissioner Sandy O’Laughlin, seeking a temporary restraining order to delay the effective date and to acquire some clarity on the new law’s requirements. The new law, Nevada Senate Bill 248, requires debt collectors to provide medical debtors with a 60-day notice of placement or assignment before the debt collector takes any action to collect a medical debt. For more information, click here.
- On June 25, California Governor Gavin Newsom and legislative leaders of both the California Senate and State Assembly announced a proposed extension of California’s statewide evictions moratorium until September 30 and an increase in compensation for California’s rent relief program. For more information, click here.
- On June 25, the California Department of Financial Protection and Innovation issued a notice of rulemaking, seeking to incorporate changes to its debt collection license application. Specifically, under the proposal, collectors could apply for a license via the Nationwide Multistate Licensing System. Interested parties have until July 12 to submit their comments on the proposal. For more information, click here.
- On June 23, California Attorney General Rob Bonta announced his sponsorship of AB 488, a bill that would provide governmental oversight of charitable fundraising through internet platforms. “AB 488 would create the framework to oversee online charitable fundraising platforms by providing my office, which already oversees charitable organizations and fundraisers, the tools to match today’s virtual market,” said Attorney General Bonta. “Supervision of third-party online platforms is essential in order to make sure that donations go towards their intended purposes. This measure will give California’s generous donors and charities the peace of mind we all seek as we support one another amidst the COVID-19 pandemic.” For more information, click here.
- On June 23, Missouri Attorney General Eric Schmitt announced a settlement and consent judgment against a prominent televangelist and his production company. Attorney General Schmitt filed suit in March 2020 for marketing “silver solution” as a potential cure for the coronavirus. Under the terms of the consent judgment, the defendant will return purchase amounts to consumers and is barred from selling or advertising “silver solution” as a way to diagnose, prevent, or treat any disease or illness. For more information, click here.
- On June 7, the Connecticut Department of Banking assessed fines against a collection agency for operating in the state without a license. The agency, which surrendered its license to collect in Connecticut in 2018, was found to have continued to operate in the state until it re-filed an application last year to act as a consumer collection agency. For more information, click here.
Privacy and Cybersecurity Activities:
- On June 23, California Attorney General Rob Bonta announced his sponsorship of AB 488, a bill that would authorize the California Department of Justice to exercise supervision over charitable fundraising occurring on internet platforms to protect donors and charities from deceptive or misleading solicitations. “Over the past year we have learned just how much our society relies on support from the non-profit sector. Whether it’s passing out food to hungry families or grants to the undocumented population, the pandemic shined a light on their tireless work … . However, it has also opened the possibility for fraudulent actors to operate.” If signed into law, AB 488 would increase transparency and oversight of these online giving platforms. To read more about AB 488 requirements, click here.
- On June 23, Law360 reported that an Ohio federal judge “would [not] automatically throw out potential jurors in [a] national multidistrict opioid litigation because they are unvaccinated against COVID-19, undoing an earlier order requiring juror vaccinations.” The pharmaceutical defendants, who argued to lift the order, pointed out that there were key differences in vaccinated and unvaccinated populations. Limiting the juror pool to only those who are vaccinated, the defendants argued, “could impact the composition of the jury or its fairness.” To read more about the order, click here. This issue of whether jurors should be required to be vaccinated is ripe with privacy concerns, which are not limited to just courts. For example, should individuals have a right to keep vaccination status confidential? As COVID-19 restrictions are lifting, employers and companies, along with courts, will have to grapple with vaccination mandates and the privacy implications they carry. For those interested in learning more about the privacy implications of vaccine certificates, check out Troutman Pepper’s Law360 article by clicking here.
- On June 22, the International Association of Privacy Professionals (IAPP) reported that software designer Surfshark conducted a study on pandemic-era employee monitoring trends compiled as its yearly “Employee Surveillance Report.” Surfshark’s report details the software that employers use to monitor and track their employees, the law on employee monitoring, and “potential employee privacy tactics.” Most notably, the report finds that only Delaware and Connecticut currently require employers to inform its employees that they are being monitored. To read more about Surfshark’s report, click here. The legality of employee monitoring is quickly developing, especially as employees are increasingly working from home because of COVID-19. Worktime, an employee monitoring service provider, released “12 most asked questions” on employee monitoring laws. For those interested in learning more, click here.