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 are closely tracking 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 February 5, U.S. Treasury Secretary Janet Yellen issued a statement on the historic impact of economic crises on people of color. For more information, click here.

• On February 4, Acting Director of the Consumer Financial Protection Bureau (CFPB) David Uejio issued a statement regarding the CFPB’s efforts to address housing insecurity, promote racial equity, and protect small businesses’ access to credit. Uejio said he was directing CFPB’s Division of Research, Markets, and Regulations to “explore options for preserving the status quo with respect to [the qualified mortgage rule] and debt collection rules.” The debt collection rule is currently scheduled to go into effect on November 30, 2021. For more information, click here.

• On February 3, the Federal Trade Commission (FTC) provided the Consumer Financial Protection Bureau a summary of its activities enforcing the Equal Credit Opportunity Act. The summary also outlines the FTC’s business and consumer education efforts on fair lending issues. For more information, click here.

• On February 2, the U.S. Treasury Borrowing Advisory Committee issued a report on the securities industry and financial markets. The report stated that economic activity rose in the fourth quarter of 2020, with a 4% annualized increase in real GDP. It also stated that the economy has recovered rapidly since the early stages of the pandemic but has decelerated as the winter virus resurgence weighs on the economy. For more information, click here.

• On February 2, U.S. Senators Tammy Baldwin, Sheldon Whitehouse, Sherrod Brown, Elizabeth Warren, and Richard Blumenthal introduced the Medical Bankruptcy Fairness Act of 2021. The act would reform the current bankruptcy code due to the COVID-19 pandemic. Specifically, it would waive procedural hurdles, such as the credit counseling requirement, and increase protection for homes by allowing the retention of at least $250,000 of home equity. For more information, click here.

• On February 1, the U.S. District Court for the District of New Jersey granted two national banks’ motion to dismiss a lawsuit alleging discrimination over Paycheck Protection Program (PPP) funds. The suit alleged that the banks refused to honor checks or electronic payments presented against the plaintiff’s account, and the basis for the decision was due to the businesses being predominately minority and women owned. The plaintiffs alleged violations of Section 1981 of the federal Civil Rights Act, violations of the New Jersey Civil Rights Act, and breach of contract. For more information, click here.

• On January 27, the U.S. Department of Agriculture (USDA) announced the temporary suspension of past-due debt collections and foreclosures for distressed borrowers under the Farm Storage Facility Loan and the Direct Farm Loan programs administered by the Farm Service Agency. USDA also announced that it will temporarily suspend nonjudicial foreclosures, debt offsets or wage garnishments, and referring foreclosures to the Department of Justice (DOJ), and it will work with the U.S. attorney’s office to stop judicial foreclosures and evictions on accounts previously referred to the DOJ. Additionally, USDA extended deadlines for producers to respond to loan servicing actions, including loan deferral consideration for financially distressed and delinquent borrowers. For more information, click here.

State Activities:

• On February 5, New Mexico Senate’s Health and Public Affairs Committee passed the Patients’ Debt Collection Practices Act, which would prevent health care providers from placing collection accounts or initiating lawsuits against “indigent patients” or patients whose household income does not exceed 200% of the federal poverty level. The bill will now head to the state Senate’s Judiciary Committee for consideration. For more information, click here.

• On February 4, the California Department of Financial Protection and Innovation published an invitation for comments on proposed rulemaking regarding enforcement of the California Consumer Financial Protection Law, which makes it illegal for service providers to engage in unlawful, unfair, deceptive, or abusive practices. Comments must be submitted by March 8, 2021. For more information, click here.

• On February 3, Pennsylvania Attorney General Josh Shapiro announced an agreement with Comcast to delay the planned implementation of usage-based data overage charges until July 2021 in its Northeast Division. Attorney General Shapiro stated, “As Pennsylvanians continue to navigate this pandemic, we know millions are relying on the internet for school and work more than ever. This is not the time to change the rules when it comes to internet data usage and increase costs.” The amended rollout plan will also make it easier for Pennsylvania consumers to terminate their existing contracts without fees. For more information, click here.

• On February 3, the California Department of Financial Protection and Innovation announced an investigation into whether student loan debt relief companies operating in California are engaging in illegal conduct under the new California Consumer Financial Protection Law and Student Loan Servicing Act. The Student Loan Servicing Act, which took effect on July 1, 2018, requires persons engaged in the business of servicing student loans in California to obtain licenses and be subject to the state department’s oversight. The California Consumer Financial Protection Law, which took effect on January 1, 2021, expanded the state department’s regulatory and enforcement authority to cover previously unregulated consumer financial products and services. For more information, click here.

• On February 2, the Virginia Senate unanimously passed a measure changing foreclosure mechanisms. Senate Bill 1327, which restricts the circumstances under which a court may order a person’s primary residence to be sold to enforce a judgment lien, prohibits a trustee from selling a property in a foreclosure sale without sending notice of the sale to the owner and signing an affidavit attesting to such notification, increases the notice period for a foreclosure sale from 14 to 60 days, and requires the landlord of a manufactured home park to provide tenants who own their manufactured home information about housing assistance and legal aid organizations. For more information, click here.

• On February 2, California Governor Gavin Newsom announced that Suzanne Martindale has been appointed senior deputy commissioner of consumer financial protection at California’s Department of Financial Protection and Innovation. Martindale has been senior policy counsel and western states legislative manager at Consumer Reports since 2010. She will need to be confirmed by the state Senate. For more information, click here.

• On February 1, New York Attorney General Letitia James announced that the state has renewed, for the tenth time, an order to halt “the collection of medical and student debt owed to the state of New York.” This tenth renewal runs through February 28, 2021. Attorney General James stated, “In an effort to counter the financial hardships of the COVID-19 pandemic, my office is, once again, renewing the suspension of state and medical debt referred to my office for another month. We must do everything in our power to rebuild our state’s economy and give New Yorkers a helping hand.” For more information, click here.

Privacy and Cybersecurity Activities:

• On February 5, the Federal Trade Commission (FTC) warned consumers not to share their COVID-19 vaccination card information on social media. COVID-19 vaccination cards have personal information that may be valuable to identity thieves, such as “full name, date of birth, where you got your vaccine, and the dates you got it.” Scammers can “guess most of the digits of [a] Social Security number” by just knowing the date and place of birth. The FTC reminds consumers that if they must share their vaccination cards, to do so only with a small group of family and friends. To read more, click here.

• On February 4, the Cybersecurity and Infrastructure Security Agency (CISA) and industry members of the Information and Communications Technology (ICT) Supply Chain Risk Management (SCRM) Task Force announced a six-month extension to its task force. The task force previously reported on its goal relating to impacts of COVID-19 on ICT and to “make practical recommendations that can support policy and operational decisions to strengthen and build additional resilience into ICT supply chains in the future.” In its report, the task force found three key issues that impacted the ICT supply chains due to the pandemic:

• • The pandemic underscored the need for an approach already underway over the last six years: diversifying supply chains to a broader array of locations and away from single-source/single-region suppliers.
  • The pandemic exposed how some manufacturing companies were unprepared because they relied on lean inventory models, which provide great efficiency and cost-effectiveness in typical environments.
  • COVID-19 also underscored the difficulties companies face in understanding their junior-tier suppliers and their location.

To read last week’s announcement, click here. For the full November 2020 report, click here.

• On February 4, the FTC announced it had received over 2.1 million fraud reports in 2020 — the most common type of fraud reported to the FTC related to “imposter scams.” The second most common, with an elevated surge during the start of the pandemic, relates to online shopping. Compared to 2019, consumers reported a $1.5 billion increase in loss in 2020, totaling nearly $3.3 billion in losses. For those interested in reviewing the full breakdown of reports received last year, click here. To read last week’s announcement, click here.

• On February 3, U.S. Congresswoman Jackie Speier (D-CA) announced that she and other Congress members introduced legislation that would aid states to adopt better user privacy protections for contact-tracing systems. “Several states are already using [contact-tracing systems], but it will only succeed if users can trust their information is safe. Our bill ensures that users can feel confident if they do their part and download a contact tracing app because their private data will be protected and secure.” The Secure Data and Privacy for Contact Tracing Act would include several critical privacy protections, which include:

• • Requiring that contact tracing is voluntary.
  • Requiring that information collection shall be minimized and proportionate to achieve contact-tracing objectives.
  • Offering individuals the assurance that contact-tracing information is anonymized, “allowing only authorized public health authorities or other authorized parties to have access to personally identifiable information.”

To read the full bill, click here. To read the announcement, click here.

• On February 1, the Consumer Financial Protection Bureau (CFPB) reminded subscribers of COVID-19-related scams and offered resources to avoid them. With scammers taking advantage of people during continued uncertainty due to the COVID-19 pandemic, the first step individuals should take is in trying to avoid them. Specifically, the CFPB reminds consumers to watch out for several types of scams, including COVID-19 vaccine scams, charity scams, Social Security pandemic relief scams, and more.

• On February 1, the FTC launched its “Identity Theft Awareness Week.” The week included a series of events to help consumers take steps to “reduce their risk of identity theft and recovery if identity theft occurs” during the COVID-19 pandemic. The FTC participated in several webinars and highlighted certain events to assist consumers in protecting their personal information. FTC experts discussed identity theft during the pandemic, and a Facebook Live discussion took place, focusing on “COVID-19-related theft [and] current trends[.]” To learn more, click here.