Like most industries today, Consumer Finance Services businesses continue to be significantly impacted by COVID-19.
To help you keep abreast of relevant activities, below find a breakdown of some of the biggest legislative and regulatory events at the federal and state levels to impact the Consumer Finance Services industry this past week:
- On April 18, the Consumer Financial Protection Bureau (CFPB or Bureau) published a blog post, scrutinizing the practice of withholding transcripts from students with delinquent accounts and who are attending an institute of higher education. The CFPB is clearly signaling that the practice of withholding transcripts as a debt collection tactic does not make much sense to the Bureau, stating: “It is particularly perplexing, as it can undermine rather than enhance a student’s likelihood of repaying.” For more information, click here.
- On April 5, the Securities and Exchange Commission (SEC) announced that two employees improperly accessed adjudicatory materials for cases litigated in the agency’s in-house court system. The access occurred in 2017, and the SEC stated the breach “did not impact the actions taken by the staff investigating and prosecuting the cases or the commission’s decision-making in the matters.” For more information, click here.
- On March 31, the SEC issued Staff Accounting Bulletin No. 121 (Bulletin), noting that a company safeguarding or exerting custody over cryptocurrency on behalf of its platform users must clearly report the users’ assets as liabilities on the company’s financial statement, along with the risks consumers face by entrusting the company with their private, cryptographic keys. The Bulletin requires entities that file with the SEC to comply with this updated guidance by June 15. For more information, click here.
- On April 15, the CFPB released its annual Fair Debt Collection Practices Act (FDCPA) report, which summarizes the CFPB’s activities to administer the FDCPA and also includes activities conducted by the Federal Trade Commission (FTC) relating to debt collection. The report found that debt collection entities have reported increased consumer contacts and payments during the COVID-19 pandemic. For more information, click here.
- On April 19, the CFPB released a report on financial challenges facing rural communities. The CFPB indicates many rural communities are “banking deserts.” “For decades, many government agencies have turned a blind eye to pressing problems facing families, farmers, and businesses in rural communities,” said CFPB Director Rohit Chopra. “The CFPB will be focusing on ways to ensure that rural communities can better access relationship banking services and achieve their economic potential.” For more information, click here.
- On April 21, the CFPB and New York Attorney General Letitia James sued “repeat offender MoneyGram for leaving families high and dry.” The lawsuit alleges the company stranded customers waiting for money when it failed to promptly deliver funds as promised. “MoneyGram spent years failing its customers and failing to follow the law, ignoring customer complaints and government warnings in the process,” said CFPB Director Rohit Chopra. “MoneyGram’s long pattern of misconduct must be halted.” For more information, click here.
- On April 20, the CFPB issued a report spotlighting medical billing challenges. The report draws from the rising volume of medical billing and collection complaints submitted to the CFPB. “Many Americans feel forced to pay medical bills that they have already paid or never owed to begin with,” said CFPB Director Rohit Chopra. “The credit reporting system should not be used as a weapon to coerce patients into paying medical bills they do not owe.” For more information, click here.
- On April 19, the Department of Education announced actions to “fix longstanding failures in the student loan programs.” These actions are estimated to provide assistance to 3.6 million borrowers — to move them closer to debt forgiveness — and for 40,000 borrowers to receive immediate forgiveness. For more information, click here.
- On April 21, New York Attorney General Letitia James and the CFPB filed a lawsuit against a large international money transfer provider for allegedly and repeatedly violating consumer protection laws. The lawsuit alleges the defendant “did not accurately notify consumers when their transfers would be available to recipients abroad and failed to implement required policies and procedures designed to help protect consumers, essentially leaving consumers in the dark about their money transfers when something went wrong.” For more information, click here.
- On April 18, New York Attorney General Letitia James issued a reminder to landlords that they cannot raise rents if they accepted or plan to accept funding from the state’s Emergency Rental Assistance Program (ERAP). “The rules are clear: Landlords who accept ERAP payments cannot raise rents for 12 months,” said Attorney General James. “This program was created to support struggling tenants and keep New Yorkers in their homes during the pandemic. Landlords who accepted payments from the state yet are still raising rents are double dipping and breaking the law.” For more information, click here.
- On April 20, Pennsylvania Attorney General Josh Shapiro announced his office reached a settlement with towing companies for allegedly violating Pennsylvania’s Consumer Protection Law and Philadelphia Towing Law after towing lawfully parked vehicles. Consumers also reported that the companies would demand cash payments to return or release the vehicles. “A lot of Pennsylvanians depend on their cars for their livelihoods,” said Attorney General Josh Shapiro. “When towing companies don’t comply with the law, it puts consumers in a desperate position. These companies kept their wheels turning by taking advantage of people who had done nothing wrong in order to scam them out of their hard-earned money. This isn’t just a ripoff, it’s illegal.” For more information, click here.
- On April 20, the Cybersecurity and Infrastructure Security Agency (CISA), along with the Federal Bureau of Investigation (FBI), National Security Agency (NSA), and other international partners published a joint cybersecurity advisory on Russian state-sponsored and criminal cyber threats to critical infrastructure that could impact organizations both within and beyond Ukraine. The advisory recommends several immediate actions, including prioritizing patching of known exploited vulnerabilities, enforcing multifactor authentication, monitoring remote desktop protocol (RDP), and providing end-user awareness and training. For the full advisory, click here.
- On April 20, Congressman Ted W. Lieu (D-Los Angeles County) introduced legislation that would require governmental entities to obtain a warrant before requesting that an electronic communications provider disclose a customer’s metadata. This legislation would amend Section 2703 of the Stored Communications Act (SCA), which protects some electronic communications from unauthorized disclosure, including metadata also stored electronically. For the press release, click here.