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:
- On July 23, U.S. Secretary of the Treasury Janet L. Yellen sent a letter to congressional leadership, stating that, as of August 1, 2021, the outstanding debt of the United States will be at the statutory limit. For more information, click here.
- On July 20, the Federal Reserve Board released a statement on the Community Reinvestment Act (CRA), announcing its commitment to working together with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to jointly strengthen and modernize regulations implementing the CRA. For more information, click here.
- On July 20, the House of Representatives passed the Consumer Protection and Recovery Act, which aims to revive the Federal Trade Commission’s (FTC) authority to return money to consumers harmed by companies found to engage in deceptive practices. For more information, click here.
- On July 19, the Federal Reserve Board and the Federal Deposit Insurance Corporation released the public sections of eight large domestic firms’ resolution plans as required by the Dodd-Frank Act and commonly known as living wills. Resolution plans describe the company’s strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure. For more information, click here.
- On July 23, the Biden administration initiated a request for information — the formal process of inviting public comment — to address issues with the Public Service Loan Forgiveness (PSLF) program. PSLF is a federal student loan program through which certain borrowers can apply to have their federal student loans forgiven after working as a full-time employee for government entities or 501(c)(3) nonprofit organizations for 10 years or more. For more information, click here.
- On July 23, the Federal Housing Administration (FHA) announced COVID-19 recovery options to help COVID-19 financially impacted homeowners with FHA-insured mortgages bring their mortgage current and remain in their homes. The COVID-19 recovery options allow mortgage servicers to offer eligible homeowners, who cannot resume making their mortgage payments, a reduction in the principal and interest portion of their monthly payments. For more information, click here.
- On June 30, the U.S. Department of Defense released its report to Congress on the effect that a 30% MAPR would have on servicemember retention and readiness. Required by Congress as part of last year’s defense appropriations bill, the report claims that the Military Lending Act is working as intended. For more information, click here.
- On July 28 at 1:30 p.m. PST, the California Department of Financial Protection and Innovation will hold the inaugural meeting of its Debt Collection Advisory Committee. To attend the meeting, click here.
- On July 18, Indiana University’s COVID-19 vaccine mandate and related face-masking and testing requirements survived challenging students’ motion for a preliminary judgment. The students argued the vaccine requirement was a due process violation under the Fourteenth Amendment to the U.S. Constitution. The U.S. District Court for the District of Indiana ended its 101-page opinion, stating “[r]easonable social policy is for the state legislature and its authorized arms, and for the people to demand through their representatives.” For more information, click here.
- On July 16, Massachusetts Attorney General Maura Healey issued guidance “to protect families [that] have begun receiving a federal child tax credit this week from debt collection practices.” According to Attorney General Healey’s press release, this guidance states that “these direct payments are exempt from seizure or garnishment under Massachusetts law. Any attempt to garnish or otherwise seize these funds to collect or attempt to collect a debt violates the AG’s Debt Collection Regulations.” The child tax credit is part of the American Rescue Plan, which provides families with monthly payments of up to $300 per child for the remainder of 2021. The guidance resulted from concerns that debt collectors would seize the funds. For more information, click here.
- On July 16, Massachusetts Attorney General Healey issued a press release that “the U.S. Department of Education [dropped] its appeal of a federal court order canceling the loans of 7,200 students in Massachusetts who were defrauded by Corinthian Colleges, Inc. Corinthian operated two for-profit schools in Massachusetts under the name Everest Institute.” Attorney General Healey said, “Our office, alongside the fierce advocates at the Project on Predatory Student Lending, stood by these students and their families from the start and hopes that today’s announcement brings some comfort and helps improve financial stability.” For more information, click here.
- On July 13, state Republican Senator Bob Hackett re-introduced the Financial Accountability and Independence Recovery (FAIR) Act in the Ohio legislature, which would allow debt settlement companies to operate in the state. Following a state Supreme Court ruling issued earlier in the year, the bill’s prospects for passage might be different this time around. For more information, click here.
- On July 20, the FTC released its agenda for PrivacyCon 2021, which covers topics relating to algorithms, advertising, the Internet of Things (IoT), and COVID-19-related privacy matters. Scheduled as an online event, PrivacyCon will occur from 9 a.m. to 5 p.m. ET on July 27. For those interested in attending, click here for additional information.
- On July 19, California Attorney General Rob Bonta announced the continued enforcement of the California Consumer Privacy Act and urged Californians to utilize their privacy rights. “Enforcement of the CCPA marks an enormous step for privacy protection in California, particularly at this time after the COVID-19 pandemic moved so much of our lives online … . Plain and simple: Exercise your rights under the CCPA. Any Californian is empowered to opt out of the sale of their personal information online.” Beginning July 1, 2020, the California Department of Justice began enforcing the CCPA by notifying businesses found not complying with the law. Under the CCPA, businesses that received notices had 30 days to cure or fix the alleged violation before an enforcement action can be initiated. Notices to cure have been issued to entities, including data brokers, marketing companies, businesses handling children’s information, media outlets, and online retailers. To learn more about what rights consumers have under the CCPA and what is required of businesses, click here.