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:

Federal Activities

State Activities

Privacy and Cybersecurity Activities

Federal Activities:

  • On May 19, the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule that describes states’ authorities to pursue lawbreaking companies and individuals that violate the provisions of federal consumer financial protection law. Because of the crucial role states play in protecting consumers, the Consumer Financial Protection Act grants their consumer protection enforcers the authority to protect their citizens and otherwise pursue lawbreakers. For more information, click here.

  • On May 19, the Department of Commerce’s International Trade Administration issued a request for comment (RFC), seeking public input on the development of a framework for driving economic competitiveness and leadership in, and leveraging of, digital asset technologies as part of reinforcing U.S. leadership in the global financial system. In its RFC, Commerce invites input on any matter relevant to its development of the framework, and it seeks comments on 17 specific questions about the global competitiveness of U.S. digital asset businesses, comparisons to traditional financial services and financial inclusion considerations, as well as technological considerations. For more information, click here.

  • On May 17, the CFPB released an enforcement memorandum that addresses prohibited practices on claims about Federal Deposit Insurance Corporation (FDIC) insurance. Specifically, firms cannot misuse the FDIC’s name or logo or make deceptive representations about deposit insurance. The issue has taken on renewed importance with the emergence of financial technologies — such as crypto assets, including stablecoins — and the risks posed to consumers if they are lured to these or other financial products or services through misrepresentations or false advertising. For more information, click here.

  • On May 17, Securities and Exchange Commission Chair Gary Gensler discussed the need for greater investor protection of crypto markets, in particular the risk that crypto trading and lending platforms may be selling unregistered securities. “As it relates to crypto tokens, if investors are putting money behind a group of entrepreneurs raising money from the public in anticipation of profits, that’s the hallmark of an investment contract or a security under our jurisdiction,” he said. In testimony that same day to Congress, Gensler said that the “highly volatile and speculative crypto marketplace has mushroomed.”

  • On May 16, the CFPB published a report, examining mortgage servicers’ responses to the COVID-19 pandemic. The data, collected across 16 large servicers from May through December 2021, reveals homeowners continue to face significant risks and challenges connected to working with their mortgage servicers. This problem is particularly acute for those borrowers struggling to make their mortgage payments after exiting COVID-19 hardship forbearances. For more information, click here.

  • On May 16, the CFPB announced that it will launch a new initiative to provide guidance to other agencies with consumer financial protection responsibilities on how the CFPB intends to enforce federal consumer financial law. 12 U.S.C § 5481(14). The CFPB will use Consumer Financial Protection Circulars, described as “general statements of policy,” under the Administrative Procedure Act. These circulars will provide background information about applicable law; articulate considerations relevant to the CFPB’s exercise of its authorities; and, in the interest of maintaining consistency, advise other parties with authority to enforce federal consumer financial law. Circulars will be released publicly. For more information, click here.

State Activities:

  • On May 18, the Minnesota legislature passed an amended version of SF 2922. SF 2922 contains a work-from-home provision that would allow collection agency staff to continue working remotely. Should the bill be signed into law, the work-from-home provision would take effect on June 1. For more information, click here.

  • On May 17, North Carolina Attorney General Josh Stein announced his office had secured a temporary restraining order against a tax company for “allegedly unlawfully deceiving North Carolinians who were trying to apply for COVID-19-related financial and housing assistance.” According to the press release, the company “advertised that it could help North Carolinians apply for pandemic-related financial assistance, but it charged them for application assistance services even though people could apply for either program for free.” Attorney General Stein stated, “These government programs were created to help people in dire need. Preventing them from getting the help they needed, while also taking their money under false pretenses, is unconscionable. And it’s against the law.” For more information, click here.

Privacy and Cybersecurity Activities:

  • On May 19, the Federal Trade Commission (FTC) adopted a new policy statement, announcing a crackdown on education technology companies that surveil children when they go online to learn. The statement makes clear that ed tech providers must comply with the Children’s Online Privacy Protection Act (COPPA). COPPA imposes data minimization requirements, use prohibitions, retention limitations, and security requirements. Companies that fail to follow COPPA could face potential civil penalties and new requirements and limitations on their business practices. For the full statement, click here.

  • On May 17, the State and Local Government Cybersecurity Act of 2021 (S.2520) passed the House and now awaits President Biden’s signature. S.2520 would update the House Homeland Security Act and direct the Department of Homeland Security to improve information sharing and coordination with state, local, and tribal governments. It would encourage federal cybersecurity experts to share information regarding cybersecurity threats, vulnerabilities, and breaches, as well as resources to prevent and recover from cyberattacks. The bill would also build on previous efforts by the Multi-State Information Sharing and Analysis Center (MS-ISAC) to prevent, protect, and respond to future cybersecurity incidents. For the bill, click here.