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 August 13, the U.S. Department of the Treasury and the Internal Revenue Service announced that families that include roughly 61 million eligible children received more than $15 billion in the second monthly payment of the expanded and newly advanceable Child Tax Credit from the American Rescue Plan passed in March. The number of payments this month increased and cover an additional 1.6 million children. Eligible families received a payment of up to $300 per month for each child under age six and up to $250 per month for each child age six to 17. For more information, click here.
- On August 13, U.S. District Judge Dabney Friedrich allowed the Biden administration’s new eviction moratorium to remain in place. The court determined that it was bound by a previous appellate ruling that the Centers for Disease Control and Prevention (CDC) likely possessed the authority to impose an eviction ban in the name of public health. For more information, click here.
- On August 13, the U.S. Occupational Safety and Health Administration published its updated COVID-19 guidance to account for the CDC’s July 27 guideline change, recommending fully-vaccinated people mask in all “public indoor settings” in areas of high and substantial COVID-19 transmission. For more information, click here.
- On August 12, the U.S. Department of Housing and Urban Development and the Federal Housing Finance Agency announced a new memorandum of understanding (MOU) between the two agencies, which codifies a collaborative agreement on fair housing and fair lending coordination. Under the MOU, the two agencies will focus on enhancing their enforcement of the Fair Housing Act. For more information, click here.
- On August 11, the U.S. Senate Banking Committee Ranking Member Pat Toomey launched an effort to overturn the CDC’s eviction moratorium. He sent a letter requesting that the Government Accountability Office decide whether the CDC’s latest eviction moratorium constitutes a rule for purposes of the Congressional Review Act. For more information, click here.
- On August 10, the Consumer Financial Protection Bureau published a report, detailing 16 large mortgage servicers’ COVID-19 pandemic response. The report’s data metrics include call handling and loan delinquency rates, while highlighting the industry’s widely varied response to the pandemic for, and demonstrate concrete efforts toward, improvement. For more information, click here.
- On August 9, the U.S. Department of Eduction reversed a Trump administration policy that shielded companies that manage its $1.5 trillion student loan portfolio from state regulation. For more information, click here.
- The Pentagon will require all military personnel to get the COVID-19 vaccine by September 15, according to an August 9 memo from Defense Secretary Lloyd Austin. The decision comes a week after President Biden told defense officials to develop a plan, requiring troops to get shots as part of a broader campaign to increase vaccinations in the federal workforce. For more information, click here.
- On August 16, the U.S. District Court for the District of Nevada is scheduled to hear evidence from the accounts receivable industry on the anticipated effects of Nevada Senate Bill 248 (S.B. 248). S.B. 248 would require debt collectors to provide medical debtors with a 60-day notice of placement before collecting on any medical debt. The bill also would prohibit or restrict credit reporting, as well as related fee collection, on such debt. For more information on S.B. 248, click here.
- On August 13, New York Attorney General Letitia James issued a consumer alert, warning New Yorkers about the “Boss Scam” — a “common text and email scam in which fraudsters pose as a consumer’s employer and request gift cards due to a purported work emergency.” Attorney General James stated: “Due to COVID-19 safety measures, many employees are still working remotely which makes it easier to fall for this common scam … . A legitimate employer will never ask you to purchase gift cards in order to pay clients or for other business purchases. I urge all New Yorkers to be on the alert for this type of fraud, and to protect themselves and their wallets by following our simple tips.” For more information, click here.
- On August 13, the Fifth District Court of Appeals in Dallas issued a ruling, upholding a judge’s order under the Texas Disaster Act that mandated masks in schools and businesses. The Fifth District Court of Appeals found that the act’s plain language did not demonstrate that Governor Abbot could issue an executive order suspending the authority of mayors and county judges to manage local disasters. For information, click here.
- On August 12, the U.S. Supreme Court enjoined enforcement of Part A of New York’s COVID-19 Emergency Eviction and Foreclosure Prevention Act, pending disposition of an appeal to the court. Part A precludes a landlord from contesting a tenant’s self-certification of financial hardship (which prevents eviction or judgment possession), effectively denying the landlord a hearing. The Court found that the inability to challenge a claim of financial hardship violates the due process clause since “no man can be a judge in his own case.” For more information, click here.
- On August 11, the Supreme Court of Virginia issued an emergency order, indefinitely authorizing out-of-state attorneys, as well as law professors from accredited state colleges and universities, to provide pro bono representation to tenants facing eviction. Virginia is now at least the third state in the country to loosen rules governing legal representation in response to the public health crisis. The order comes on the heels of the CDC’s new eviction moratorium that applies to renters living in communities experiencing substantial or high transmission of COVID-19 through October 3.
- On August 10, Delaware Governor John Carney announced that state employees and visitors to Delaware state facilities must wear masks indoors starting August 16. The statewide mask requirement is consistent with CDC guidance and applies to all individuals, regardless of their vaccination status. For more information, click here. Additionally, on August 14, Governor Carney announced that beginning on September 30, Delaware state employees must provide proof of vaccination or undergo regular testing for COVID-19. While the state’s requirements will offer employees the choice between getting vaccinated or getting tested, federal guidance permits employers to require vaccinations, as several Delaware employers have decided to do. For more information, click here.
- On August 11, the Federal Financial Institutions Examination Council (FFIEC) released new guidance on risk management principles associated with authentication and access to financial information. The guidelines apply to “customers, employees, and third parties accessing digital banking services and information systems.” For instance, the FFIEC highlighted “the current cybersecurity threat environment including increasing remote access by customers and users, and attacks that leverage compromised credentials[.]” The increase in remote access was likely accelerated due to the COVID-19 pandemic. To learn more, check out Troutman Pepper’s recently published blog post, where we discuss the FFIEC’s guidance by clicking here. For those interested in reading the full guidance, click here.
- On August 11, the National Institute of Standards and Technology of the U.S. Department of Commerce released findings relating to a study on kids’ passwords, showing the gap between knowledge of password best practices and behavior. Likely accelerated during the COVID-19 pandemic, minors are interacting with internet-connected devices at a young age, making them savvier, “but they still face the same cybersecurity threats.” The report nonetheless showed that many kids are “learning best practices on passwords, such as limiting their writing of passwords on paper, keeping their passwords private, and logging out after online sessions.” For those interested in reading the full announcement, click here.