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.

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 March 11, the U.S. Department of the Treasury released frequently asked questions on how sanctions imposed on Russia extend to virtual currency, including that “U.S. persons, including virtual currency exchanges, virtual wallet hosts, and other service providers, such as those that provide nested services for foreign exchanges, are generally prohibited from engaging in or facilitating prohibited transactions, including virtual currency transactions in which blocked persons have an interest.” For more information, click here.

  • On March 11, in a televised interview, Consumer Financial Protection Bureau Director (CFPB) Rohit Chopra discussed payment systems and cryptocurrencies, including that “we need in our country a fast, real time payments system that is frictionless and robust.” Chopra also said the CFPB has “ordered” companies to share their plans and thinking for crypto. “We’re going to be working with the other regulators to figure out how do we make sure that consumers are protected no matter if they’re using cash, credit cards, debit cards, or virtual currencies,” Chopra stated. For more information, click here.

  • On March 10, the Federal Trade Commission announced that a payment processing company, which allegedly helped a bogus discount club scheme debit tens of millions of dollars from consumers without authorization, will be required to pay $2.3 million and face a permanent ban from working with high-risk clients as a result of a lawsuit. For more information, click here.

  • On March 9, U.S. President Joe Biden issued an executive order to establish the first comprehensive federal digital asset strategy for the U.S., which would promote digital asset innovation, while balancing benefits and associated risks. The executive order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation. For more information, click here.

  • On March 3, U.S. Senator Sherrod Brown introduced a Senate bill that would ban forced arbitration clauses in the financial services industry. For more information, click here.

State Activities:

  • On March 4, New York Attorney General Letitia James launched a rulemaking process to “look into whether major corporations are using the pandemic and inflation as an excuse to unfairly raise the price of basic goods.” Attorney General James stated, “Throughout the pandemic, hardworking New Yorkers have been struggling to make ends meet, but big corporations have been celebrating record breaking profits. It doesn’t add up. My office is prepared to use every tool in our toolbox to crack down on price gouging and pandemic profiteering.” According to the press release announcing the rule launch, this is the “first-ever price gouging rulemaking process by the Office of the Attorney General.” For more information, click here.

  • The General Assembly of Virginia passed a bill, permitting “banks” to provide customers with “virtual currency custody services so long as the bank has adequate protocols in place to effectively manage risks and comply with applicable laws.” The law also includes the first definition of “virtual currency” in Virginia, defined as “an electronic representation of value intended to be used as a medium of exchange, unit of value, or store of value,” which “does not exist in a physical form; it is intangible and exists only on the blockchain or distributed ledger associated with a particular virtual currency.” For more information, click here.

Privacy and Cybersecurity Activities:

  • On March 9, the U.S. Securities and Exchange Commission proposed amendments to its rules to “enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incident reporting by public companies.” The proposed amendments would require current reporting about material cybersecurity incidents and periodic reporting to provide updates about previously reported cybersecurity incidents. The proposed amendment includes requiring registrants to disclose information about a cybersecurity incident within four businesses days after the registrant determines that it has experienced a material cybersecurity incident. To read the proposed rule, click here.

  • On March 9, California Senator Josh Becker announced legislation to strengthen California’s data broker law. Senate Bill 1059 proposes stricter rules for data brokers’ annual registration and reporting requirements, while increasing the penalties scheme. It proposes joint enforcement between the California Department of Justice and the California Privacy Protection Agency. To read the press release, click here.