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. You may access this interactive tool at https://covid19.troutman.com/.

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:

Federal Activities

State Activities

Privacy and Cybersecurity Activities

Federal Activities:

  • On September 29, the Consumer Financial Protection Bureau (CFPB) released its fifth biennial report to Congress on the consumer credit card market, finding that the market’s growth over the last few years reversed course in 2020. In reviewing the market for potential consumer harm, the report presents the latest research on consumer card use, cost, and availability. From a 2019 peak of $926 billion, credit card debt fell to $811 billion by the second quarter of 2020 — the largest six-month decline on record — before reaching $825 billion by the end of the year. For more information, click here.
  • On September 28, Federal Trade Commission (FTC) Chair Lina M. Khan announced that she has appointed Holly Vedova as director of the FTC’s Bureau of Competition and Samuel A.A. Levine as director of the Bureau of Consumer Protection. Ms. Vedova and Mr. Levine have served as acting directors of these two bureaus since June of this year. For more information, click here.
  • On September 22, the Internal Revenue Service announced that it awarded new contracts to three private sector collection agencies to collect overdue tax debts. Beginning September 23, taxpayers with unpaid tax bills may be contacted by one of the following three agencies: CBE Group, Inc., Coast Professional, Inc., and ConServe. For more information, click here.

State Activities:

  • Two bills — S.B. 531 and A.B. 424 — recently passed in California have been enrolled and presented to the governor for his signature. Among other provisions, S.B. 531 would prohibit debt collectors (with limited exceptions) from making a written statement attempting to collect delinquent consumer debt unless they have access to a contract, or other evidence, demonstrating the debt. A.B. 424 would, among other provisions, place new documentation requirements on any collection activity concerning student loans for private lenders. For more information, click here and here.
  • On September 30, North Carolina Attorney General Josh Stein issued a press release, commending Duke Energy for extending its utility disconnections moratorium. Duke Energy announced it is voluntarily extending its moratorium on utility disconnections through March 2022 for customers who qualify for energy assistance funding programs. Attorney General Stein stated, “We are not out of this pandemic yet, and people still need access to water, power, and gas in their homes to stay healthy and prevent the spread of COVID-19.” For more information, click here.
  • On September 29, Massachusetts’ top appellate court released an order directing state trial judges who conduct virtual bench trials in criminal cases to “explain to the defendant the procedure to be followed during the trial, including how to communicate with counsel, and the arrangements made for witness testimony and the public’s access to the proceedings.” It also informs trial judges that they “shall obtain a defendant’s assent to a virtual bench trial on the record[,]” else it appears the trial would be held in person despite COVID-19 risks. For those interested in reading the complete order, click here.
  • On September 29, the New York Department of Financial Services issued a proposed regulation to implement a new bill, which requires consumer-like disclosures for “commercial financing” transactions of $2.5 million or less. It would become effective on January 1, 2022. Comments on the proposal will be due no later than 60 days after the date it is published in the State Register. For more information, click here.
  • On September 25, Michigan Attorney General Dana Nessel issued a press release regarding the September 26 implementation of the Financial Exploitation Prevention Act. Per the press release, the statute “enacts new requirements on financial institutions to ensure they have training and procedures [in place] to better recognize the signs of financial exploitation and take action to protect those who are unable to protect themselves from abuse, neglect, or exploitation because of a mental or physical impairment or because of advanced age.” The act “also allows financial institutions to freeze customer transactions or assets under certain circumstances; provides immunity from criminal, civil, or administrative liability to financial institutions for actions taken in good faith under the Act; and provides for the powers and duties of certain governmental officers and entities to enforce the Act.” For more information, click here.
  • On September 23, the Division of Banks of the Massachusetts Office of Consumer Affairs and Business Regulation issued a supervisory alert to warn financial institutions of the potential legal and regulatory risks related to the disclosure of nonsufficient funds fees. For more information, click here.

Privacy and Cybersecurity Activities:

  • On September 30, the U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) issued guidance and a reminder to the public — specifically to employers — that the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule “does not apply to employers or employment records.” HHS reminds the public that HIPAA’s Privacy Rule “only applies to HIPAA covered entities (health plans, health care clearinghouses, and health care providers that conduct standard electronic transactions.), and, in some cases, to their business associates.” For those interested in reading HHS’ full statement, click here. For those interested in learning more about the privacy implications of vaccination requirements in the workplace, check out Troutman Pepper’s Law360 article by clicking here.
  • On September 27, the FTC released guidance to individuals who believe they may have paid a scammer, likely due to the continued economic effects caused by the COVID-19 pandemic. While the FTC’s guidance focuses on individuals who paid someone, it is likely they also shared their personal information. The FTC recognizes that “[s]cammers can be very convincing[.]” However, what should individuals do after they have been scammed? The FTC informs the public that they should immediately contact their bank, gift card provider, or credit card company used to send money. Those who wired money to the scammer should contact the wire transfer company right away. To read the FTC’s complete guidance, click here.