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 is 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:
Privacy and Cybersecurity Activities
- On September 10, 2020, the Criminal Division of the Justice Department announced that it had reached 57 criminal prosecutions for fraud in connection with the Paycheck Protection Program in under six months since its enactment. These prosecutions are in addition to other federal cases brought by U.S. Attorneys around the country. For more information, click here.
- On September 8, 2020, the Consumer Financial Protection Bureau, in partnership with the New York Attorney General, filed suit against a network of five companies based outside of Buffalo, New York, two of their owners, and two of their managers, for their participation in a debt-collection operation using illegal methods to collect debts during the COVID-19 pandemic. For more information, click here.
- On September 10, 2020,Colorado Attorney General Phil Weiser announced a virtual meeting on Thursday, October 1, 2020, to solicit feedback regarding whether Colorado should extend a prohibition on certain collection activities through February 2021 as a response to the COVID-19 pandemic. The limitations are currently set to expire on November 1, 2020, unless the Attorney General determines that an extension is necessary. For more information, click here.
- On September 9, 2020, the Deputy Superintendent of the New York Department of Financial Services issued guidance to New York state-regulated mortgage lenders and servicers regarding fees paid to register mortgages in default. The guidance reminds servicers of the restrictions on fees and charges set forth under Part 419 of the Superintendent of Financial Services Regulations, and directs servicers to reverse and/or refund and credit registration fees impermissibly charged to New York borrowers, and to create a log of all borrowers who were either charged, or paid any registration fee to a Servicer. For more information, click here.
- On September 8, 2020, New York Attorney General Letitia James extended the suspension of debt collection for medical and student debt owed to the state of New York for another 30 days, through at least October 4, 2020, in response to financial impacts resulting from the spread of COVID-19. The suspension applies to medical and student debt that has been specifically referred to the Office of the Attorney General for collection. For more information, click here.
- On August 27, 2020, Troutman Pepper attorney David Anthony presented for RMAi’s webinar “Combating State Court Consumer Counterclaims.” The webinar is available here. With the financial fallout of the novel COVID-19, consumer financial services businesses should anticipate an increase in state court counterclaims filed in response to collection actions. These counterclaims are often challenging and can make it practically difficult to come out ahead financially if not handled appropriately. The presentation provides helpful information for businesses or litigators who routinely deal with state court collection actions. For more information, click here.
Privacy and Cybersecurity Activities:
- On September 11, 2020, the Federal Trade Commission (FTC) warned consumers strapped for cash during the pandemic of scammers asking them to pay for products or services using gift cards. Scammers often claim to be from the government telling consumers there’s a problem with their Social Security number after winning a prize. Scammers then proceed by requesting gift cards to release the claimed winnings. In addition to warning consumers, the FTC also provides tips to consumers who may have fallen victim to the scam, informing consumers to “tell the company that issued the card right away [and] tell them the gift card was used in a scam.” For the full warning, click here.
- On September 10, 2020, the FTC released the agenda for the Data Portability Workshop, an online event. The Workshop “will examine the potential benefits and challenges to consumers and competition raised by data portability.” Areas of discussion include:
- An Overview of Data Portability: Concepts and Terminology;
- Data Portability Initiatives in the European Union, California, and India: Case Studies;
- Financial and Health Portability Regimes: Case Studies;
- Reconciling the Benefits and Risks of Data Portability; and
- Realizing Data Portability’s Potential: Material Challenges and Solutions.
To read the announcement, click here. To learn more about data portability, click here.
On September 8, 2020, it was reported that the Pennsylvania Department of Health is expected to release the statewide contact tracing application this month. State senators expressed concern that the application will unnecessarily track the physical locations of individuals. The state Department of Health rebutted that it has focused on safety and security, and that the application will be required to pass independent “third party security and privacy assessments before being released to Pennsylvanians.” To read the full report, click here. For more information about existing privacy guidelines for COVID-19-related apps, read our primer on Law360.