Troutman Pepper Weekly Consumer Financial Services COVID-19 Newsletter - August 2020

Troutman Pepper

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:

Federal Activities

State Activities

Privacy and Cybersecurity Activities

Federal Activities:

  • During the week of August 24, 2020, the Consumer Financial Protection Bureau (CFPB) updated pages relating to student loans and its guidance on protecting credit during COVID-19. The CFPB reminds consumers that “principal and interest payments on federally-held student loans are automatically suspended through December 31, 2020.” Additionally, the CFPB recently released additional resources for Spanish speakers, which can be viewed here.
  • On August 28, 2020, the U.S. Treasury Department and Internal Revenue Service (IRS) released guidance on President Donald Trump’s memorandum of August 8, 2020, which directed the Secretary of the Treasury to defer certain payroll taxes. The guidance allows employers to defer withholding and paying the employee’s portion of the Social Security payroll tax if the employee’s wages are below a certain amount. For more information, click here.
  • On August 27, 2020, the Federal Housing Finance Agency announces it would extend the eviction moratoriums on single-family foreclosures and real estate owned (REO) properties from August 31, 2020 to December 31, 2020. The moratorium only applies to Enterprise-backed, single-family mortgages. The REO eviction moratorium applies to Enterprise-acquired properties through foreclosure or deed-in-lieu of foreclosure transactions. For more information, click here.
  • On August 27, 2020, the FTC reminded consumers that payday loans, especially as consumers struggle financially with the effects of COVID-19, may hurt more than the loans help. These short term loans tend to get extremely expensive, very quickly, “sometimes charging annual percentage rates of as much as 500-700%.” To read the full report, click here.
  • On August 24, 2020, the Department of Veterans Affairs (VA) issued Circulars extending eviction and foreclosure moratoriums for borrowers on properties secured on VA-guaranteed loans from August 31, 2020 to December 31, 2020. For more information, click here and here.

State Activities:

  • On August 26, 2020, the New York City Department of Consumer Affairs (DCA) issued new debt collection rules related to limited English proficiency servicing, which took effect June 27, 2020. Due to the COVID-19 crisis, the DCA provided the industry with a 60-day enforcement grace period until August 26, 2020. The DCA has now extended this enforcement grace period until October 1, 2020. For more information, click here.
  • On August 21, 2020, Illinois Governor J.B. Pritzker extended Executive Order 2020-25, which includes limits on garnishments and wage deductions. The limitations are now in effect until September 19, 2020. For more information, click here.
  • On August 21, 2020, the Connecticut Department of Banking extended its no-action memo to address branch licensing issues through 2020. The no-action memo concerns the requirement that any Connecticut licensable activity by a Consumer Credit Licensee be conducted from a licensed branch office location so long as certain criteria are met. The no-action position is extended through December 31, 2020. For more information, click here.
  • On August 20, 2020, the California Assembly Appropriations Committee ordered a second reading of the Debt Collection Licensing Act (SB 908), which would require debt collectors and debt buyers to obtain a license from the California Department of Business Oversight (DBO) to collect on debts in the state. For more information, click here.

Privacy and Cybersecurity Activities:

  • On August 28, 2020, the Federal Trade Commission (FTC) provided parents with seven considerations to secure their home systems as kids begin school from home. The FTC offers several tips, ranging from updating software to ensuring privacy and security tools are enabled. To read the full report, click here.
  • On August 28, 2020, the FTC warns consumers that the recent rise in offers relating to COVID-19 are scams. Many of these offers are shared on WhatsApp or Facebook. The messages appear to be from several prominent United States brands. Consumers are reminded not to click any links, delete the messages, and call friends who may have shared the message. Click here to read the full notification.
  • On August 26, 2020, the FTC shared that the agency is “collecting data, watching the numbers, and spotting the trends” relating to scams in connection to COVID-19. The FTC has received more than “175,000 COVID-19-related reports about fraud, identity theft, Do Not Call, and other consumer protection problems.” For those interested in learning about trends specific to their communities, click here. To read the full post shared by the FTC, click here.
  • On August 25, 2020, BU Today reported that Boston University would not be notifying professors if students test positive for COVID-19. The University shared that it would not inform professors because the University wishes to protect student privacy. To read the full report, click here.
  • On August 25, 2020, it was reported that higher education institutions are struggling with how to collect and share COVID-19 related data. Universities appear to be struggling with conflicting regulations, such as those under the Clery Act (where universities receiving federal funding must disclose threats to campus safety) and the Health Insurance Portability and Accountability Act (requiring that personal health data and student records are protected). To read the full report, click here.
  • On August 24, 2020, reports discussing how researchers “developed a way for a fully wireless system to monitor not only the movement and vital signs contact-free, but also to track activities” without using video. Researchers sought to create a system of tracking that would be more privacy-preserving. The system may support long-term care and assisted living facilities, trying to fight COVID-19’s spread. Click here to read the report.
  • On August 24, 2020, the Centre for Information Policy Leadership (CIPL), a global privacy and security think tank, published a paper outlining privacy lessons related to COVID-19. The paper offered several considerations that can be put toward a U.S. privacy framework. They are:
    • Personal data is essential infrastructure;
    • Artificial intelligence applications are especially essentials;
    • Privacy is one of many fundamental rights;
    • Traditional interpretations of principles of data protection have proven insufficient to provide adequate protection;
    • The focus on collection of data is less important than the use of data after collection;
    • With less reliance on consent, we must develop and use a wider variety of tools to move to an accountability-based model of data protection; and
    • The most helpful approach to ensuring privacy in the U.S. will be comprehensive privacy legislation at the national level.

To read the full paper, click here.

  • It was recently reported that the FBI is investigating a data breach that may have compromised the identity of individuals who have tested positive for COVID-19 in South Dakota. The letter from the state agency said, “the files didn’t include any financial information, Social Security numbers or passwords.” To read the full story, click here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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