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 September 1, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund announced $5 billion in new markets tax credits that it hopes will spur investment and economic growth in low-income urban and rural communities nationwide. A total of 100 community development entities received tax credit allocations made through the calendar year 2020 round of the New Markets Tax Credit Program. For more information, click here.
- On September 1, the Consumer Financial Protection Bureau (CFPB) proposed a new rule designed to help small businesses gain access to credit by increasing transparency in the lending marketplace. If finalized, this rule would require lenders to disclose information about their lending to small businesses. Under the proposal, lenders must report the amount and type of small business credit applied for and extended, demographic information about small business credit applicants, and key elements of the price of the credit offered. For more information, click here.
- On September 3, New York Attorney General Letitia James announced that her office is assessing ways to overhaul the collection of unpaid student loans, especially those incurred by individuals attending State University of New York (SUNY) schools. Current regulation allows the AG to file suit in State Supreme Court in Albany, NY, regardless of where the individual with the unpaid student loan resides. As a result, many of the 16,000 SUNY students taken to court in the past eight years have had default judgments entered against them because they were unable to make their court date. For more information, click here.
- On September 2, the Nebraska secretary of state announced that the nationwide multistate licensing system (NMLS) is now receiving new application and transition filings for licenses, including for collection agencies and electronic surety bonds. For more information, click here.
- On September 1, the Washington, DC Mayor Muriel Bowser signed a bill into law that changes debt collection procedures, while the authors of the initial bill work on permanent changes. Under the new law, collectors would be limited to making three phone calls in a seven-day period, while also addressing communications made via email and text messaging. The three phone call limit includes all phone numbers and accounts the creditor or collector has for the consumer, but does not include consumer calls made to a collector or calls by a collector in response to a consumer’s request for a returned call. For more information, click here.
- On August 27, the Maryland Court of Appeals overturned a lower court decision by issuing a ruling that interpreted a state debt collection law to allow plaintiffs to accuse collectors of violating one of the law’s provisions in instances where the collector attempts to collect amounts that “the debt collector, to its knowledge, does not have the right to collect.” For more information, click here.
- On August 31, the CFPB warned consumers that scammers take advantage of individuals during difficult times, and the COVID-19 pandemic is no exception. The CFPB also provided individuals a series of questions to identify whether an emergency rental assistance program is a scam or legitimate. In addition, the CFPB reminds individuals that a “federal government agency will not ask [them] for personal or financial information to process [their] rental assistance application.” For those interested in reading the full announcement, click here.
- Late last month, Wired reported that hackers may be able to increase medication doses through certain types of infusion pumps. An infusion pump automates the delivery of vital medications to patients in hospitals, including those under care due to COVID-19 complications. McAfee Enterprise discovered and shared its findings, describing how they learned that “an attacker with access to a health care facility’s network could take control of the [infusion pumps] by exploiting a common connectivity vulnerability. From there they could exploit four other flaws in sequence to send the medication-doubling command,” which could lead to severe injuries or death.