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 closely track 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:
Privacy and Cybersecurity Activities
- On May 21, the Federal Reserve System, the Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency (OCC) issued the host state loan-to-deposit ratios used to evaluate compliance with Section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios replace the prior year’s ratios from June 2020. For more information, click here.
- On May 21, the U.S. Department of the Treasury announced that it has distributed $6.1 billion through the Emergency Rental Assistance Program in less than two weeks since $21.6 billion was allocated to the program. A part of the American Rescue Plan, this $21.6 billion program seeks to prevent evictions and ensure housing security for millions of Americans impacted by the affordable housing challenges exacerbated by COVID-19. For more information, click here.
- On May 20, Senate Banking Committee Chair Sherrod Brown urged Acting Comptroller of the OCC Michael Hsu to review charters granted to several cryptocurrency exchanges by the Trump administration. The letter highlights the risk of granting charters to nonbanks and the need to protect consumers and the banking system. For more information, click here.
- On May 20, Federal Reserve Chair Jerome H. Powell outlined the Federal Reserve’s response to technological advances regarding digital money. The Federal Reserve is studying these developments and exploring ways that it might refine its role as a core payment services provider and as the issuing authority for U.S. currency. It plans to issue a paper discussing the potential issuance of a digital dollar. For more information, click here.
- On May 20, the Federal Reserve Board (Board) released results of a survey of senior financial officers at banks about their strategies and practices for managing reserve balances. The Board uses the “Senior Financial Officer Survey” to obtain information about deposit pricing and behavior, bank liability management, the provision of financial services, and reserve management strategies and practices. For more information, click here.
- On May 20, U.S. Representative Linda Sanchez introduced the Fair Credit Reporting for Servicemembers Act, which would allow servicemembers to dispute any information placed on their credit report while on active duty or extended active duty. If disputed, credit reporting agencies would be required to delete the adverse item and notify the furnisher and the consumer of the deletion. For more information, click here.
- On May 20, the Federal Communications Commission announced that it is seeking comment on a proposal to reduce the amount of time that small voice service providers would have to implement Caller ID authentication technology under the STIR/SHAKEN protocols. STIR/SHAKEN is technology that allows a carrier to verify that the caller ID information matches the caller’s actual phone number. For more information, click here.
- On May 20, the U.S. Treasury Department announced that it is taking steps to crack down on cryptocurrency markets and transactions and said it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service. For more information, click here.
- On May 20, Senator Jeff Merkley introduced the Maintaining Access to Essential Services Act of 2021, which would provide $30 billion to nationwide utility companies and broadband internet providers to prevent those companies from shutting off services to customers because of unpaid debts accumulated during the COVID-19 pandemic. For more information, click here.
- On May 19, the Acting Comptroller of the OCC Michael Hsu announced that the agency has been in talks with the U.S. Federal Reserve and the Federal Deposit Insurance Corporation about setting up an “interagency policy sprint team” focused “just on crypto.” Quarles said that the Federal Reserve has worked with other agencies in a joint effort to determine a clear regulatory framework for the cryptocurrency industry. For more information, click here.
- On May 17, the Federal Deposit Insurance Corporation (FDIC) issued a request for information on activities by banks to facilitate customers’ use of cryptocurrencies and other digital assets. Specifically, the FDIC seeks information on factors that regulators should weigh as they develop supervisory practices for the use of digital assets. For more information, click here.
- On May 17, U.S. Senators Mark R. Warner and Kevin Cramer introduced the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020. This bipartisan legislation permits immediate nationwide use of remote online notarizations, a type of electronic notarization where the notary and signer are in different physical locations. For more information, click here.
- On May 14, a Tennessee federal judge declined to issue an order blocking the Consumer Financial Protection Bureau’s (CFPB) rule requiring landlords to inform tenants about federal protections put in place amid the pandemic. The court determined that the rule did not apply to the Sixth Circuit. For more information, click here.
- On May 14, the Ninth Circuit decided to not grant an en banc rehearing of the CFPB’s enforcement of a 2017 civil investigative demand against a California law firm, which previously fought the investigative demand to the U.S. Supreme Court on grounds that the agency was unconstitutionally structured. For more information, click here.
- On May 21, Washington D.C. Mayor Muriel Bowser’s latest order extending the state of emergency went into effect. The order does not contain a built in sunset indicating the duration of the state of emergency. Under prior mayoral orders, initiating communication with a debtor is prohibited while the emergency remains in effect and for 60 days thereafter. For more information, click here.
- On May 19, California Attorney General Rob Bonta issued a consumer alert warning Californians against printing fake COVID-19 vaccination cards. “We are aware of reports that counterfeit COVID-19 vaccination record cards have been advertised on social media websites, e-commerce platforms, and blogs, as a way for individuals to misrepresent themselves as vaccinated,” said Attorney General Bonta. In a press release, consumers were reminded that unauthorized use of an official government agency’s seal is a federal crime and forging or possessing forged documents is a crime in California. For more information, click here.
- On May 18, Virginia Attorney General Mark Herring announced a settlement with a travel company over COVID-19-related vacation package cancellations. This settlement, while relatively modest, serves as a shot across the bow to other companies with Attorney General Herring stating, “Companies must honor any refund policies in their contracts and my Consumer Protection Section and I will hold any companies who do not do so accountable.” For more information, click here.
Privacy and Cybersecurity Activities:
- On May 19, California Attorney General, Rob Bonta, issued an alert “warning Californians not to print fake COVID-19 vaccination records cards at home and not to purchase them from individuals selling counterfeits.” Individuals purchasing counterfeit cards could mean they are at an increased risk of fraud and scams. In addition, the AG’s office reminded the public that “vaccinations cards are given, at no cost, to those who have received at least one dose of a COVID-19 vaccine.” To read the full report, click here.
- On May 19, The New York Times reported that the European Union could likely allow vaccinated U.S. tourists to visit as early as next week. However, the report wonders “about the practical application of the rules [and] how the vaccination status of a visitor would be determined.” Making U.S.-issued vaccine certificates available to use in the EU could be a solution, but paper documents tend to be vulnerable to fraud, the report stated. For those interested in learning more about vaccine certificates and the potential implications of using them when traveling, check out Troutman Pepper’s Law360 article here.