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:
Privacy and Cybersecurity Activities
- On June 9, the Consumer Financial Protection Bureau (CFPB) launched an inquiry into practices and financial products that may leave employees indebted to their employers. In the request for information, the CFPB seeks data about, and worker experiences with, these emerging practices and financial products referred to as employer-driven debt. For more information, click here.
- On June 8, Office of the Comptroller of the Currency (OCC) proposed adding cannabis and digital currency activities to the list of business data it collects from banks in an attempt to better identify areas of risk in the financial system. For more information, click here.
- On June 7, Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) introduced the Responsible Financial Innovation Act, a bill highly anticipated by all cryptocurrency industry stakeholders. For more information, click here.
- On June 7, the Federal Reserve announced it will release a second tool to help community financial institutions implement the Current Expected Credit Losses (CECL). Known as the Expected Losses Estimator, the spreadsheet-based tool utilizes a financial institution’s loan-level data and management assumptions to aid community financial institutions in calculating their CECL allowances. For more information, click here.
- On June 3, the Federal Trade Commission (FTC) published a request for information that could form the basis for a major update of its digital advertising guidance. The FTC’s most recent digital advertising guidance — the 2013 “.com Disclosures – How to Make Effective Disclosures in Digital Advertising” (.com Disclosures Guide) — provides guidance on how to make “clear and conspicuous” disclosures in online advertisements, while also offering examples of problematic advertisements with explanations for how to make clear and conspicuous disclosures. The .com Disclosure Guide has been hugely influential in setting the bar for compliant internet advertising. For more information, click here.
- On June 9, California’s Office of Administrative Law approved commercial financing disclosure regulations, which require consumer-like disclosures for certain commercial financing products, such as small business loans and merchant cash advances. With this final step completed, these Department of Financial Protection and Innovation regulations will become effective on December 9, completing a process that began with the passage of SB 1235 in 2018. For more information, click here.
- On June 8, Colorado Governor Jared Polis signed a bill into law, prohibiting health care facilities from pursuing debt collection activities against individuals with unpaid medical bills unless those facilities comply with federal price transparency guidelines. For more information, click here.
- On June 8, the New York Department of Financial Services issued new compliance requirements for issuers of U.S. dollar-backed stablecoins. For more information, click here.
- On June 2, the Washington, D.C. City Council unanimously approved the “Protecting Consumers from Unjust Debt Collection Practices Amendment Act of 2022.” The bill clarifies that a debt collector or debt buyer may only send text messages, emails, or private messages on social media after sending the required written notice to consumers. It also clarifies that a debt collector or debt buyer may send one text message, email, or private message in any seven-day period for the purposes of acquiring consent from the consumer to communicate via one or more of these methods. For more information, click here.
Privacy and Cybersecurity Activities:
- The U.S. House Committee on Energy and Commerce’s Subcommittee on Consumer Protection and Commerce will hold a hearing on June 14 to discuss the American Data Privacy and Protection Act. Subcommittee members U.S. Representatives Frank Pallone (D-NJ) and Cathy McMorris Rodgers (R-WA) co-authored the draft.
- On June 8, the California Privacy Protection Agency Board voted unanimously to authorize Executive Director Ashkan Soltani to begin the California Privacy Rights Act rulemaking process. The agency released draft regulations in preparation for the June 8 meeting, while Director Soltani previously stated that the agency would go past the July 1 deadline, with anticipated rulemaking completion in Q3 or Q4. To read more, click here.