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 19, the state attorneys general of Massachusetts, New York, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maryland, Minnesota, Nevada, New Mexico, New Jersey, Oregon, Vermont, Virginia, Washington, and Wisconsin wrote a letter to Congress, endorsing a plan that will cancel $50,000 of student loan debt for all federal student loan borrowers. The letter states that “[b]road cancellation of Federal student loan debt will provide immediate relief to millions who are struggling during this pandemic and recession, and give a much-needed boost to families and our economy. Borrowers deserve and desperately need relief from their Federal student loan burden, and they need that relief immediately.” For more information, click here.
• On February 18, the Department of Veterans Affairs announced that it will extend its moratorium on all benefit and medical copay debt collections through at least September 30, 2021. The move to extend the moratorium through the end of the fiscal year is part of the Biden administration’s COVID-19 relief strategy plan. For more information, click here.
• On February 18, the Federal Reserve Board announced a final rule intended to reduce risk and increase efficiency in the financial system by applying netting protections to a broader range of financial institutions. The final rule amends Regulation EE (Financial Institution Netting) to apply Federal Deposit Insurance Corporation Improvement Act of 1991 netting provisions to certain new entities, including swap dealers. The rule would also clarify the existing activities-based test in Regulation EE. For more information, click here.
• On February 16, the U.S. Department of the Treasury released Treasury International Capital data for December 2020. The next release reporting January 2021 data is scheduled for March 15, 2021. The sum total in December of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows resulted in a net outflow of $0.6 billion. For more information, click here.

State Activities:

• On March 1, private and federal student loan servicers practicing in Virginia can begin applying for licenses through the Nationwide Mortgage Licensing System. The license application must be accompanied by a bond filed with the Virginia State Corporate Commission. The law containing this licensing requirement passed in April 2020 and is scheduled to take effect on July 1, 2020. For more information, click here.
• On February 18, New Mexico Senate’s Health and Public Affairs Committee passed the Patients’ Debt Collection Practices Act, which will 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 16, Colorado State Senators Faith Winter and Julie Gonzales introduced SB21-057, a bill that will expand the Colorado Student Loan Servicers Act. Currently, the act only applies to persons who service student loans. The proposed legislation would cover “private lenders, creditors, and collection agencies in connection with those student education loans that are not made, insured, or guaranteed under federal law and that are used for postsecondary education.” For more information, click here.
• On February 16, the Maryland House of Representatives held a hearing on HB 0565, a medical debt protection bill. The bill will:
  • Require a hospital to submit annually a certain report to the Health Services Cost Review Commission (Commission) at a certain time;
  • Require the Commission to post the reported information on its website;
  • Alter the required contents of a hospital’s policy on the collection of debts owed by patients; and
  • Require a hospital to provide a refund of certain amounts collected from a patient or the guarantor of a patient found eligible for reduced-cost care on the date of service.

For more information, click here.

Privacy and Cybersecurity Activities:

• On February 16, New York’s Department of Financial Services (DFS) announced a cybersecurity fraud alert on cybercriminals targeting consumer-facing websites to steal consumer information, specifically websites that display or transmit nonpublic information when offering instant quotes to consumers. DFS stated it has been informed that cybercriminals are likely stealing consumer information to “fraudulently apply for pandemic and unemployment benefits.” The alert advises organizations offering instant quotes online to:
  • Review data analytics and website traffic metrics for spikes of quote requests. Organizations should “look for any increase in consumer submissions that terminate as soon as [nonpublic information] is revealed.”
  • Determine whether server logs show evidence of unauthorized access to nonpublic information. This means that an organization’s security team will need to review the logs for the period where an increase in consumer submissions terminated after nonpublic information was revealed.

To read the full alert, click here.

• On February 16, the Federal Trade Commission (FTC) warned consumers that scammers might attempt to take advantage of individuals seeking federal COVID-19 relief. The FTC offers three ways consumers can stay protected:
  • Don’t pay to get benefits. The FTC reminds consumers to “[b]e wary of anyone who contacts you to offer financial services or rental assistance for a fee.”
  • Don’t provide personal information to anyone contacting you. The FTC reminds consumers to make sure they know to whom they are talking and that government officials will never contact consumers to acquire personal information.
  • Subscribe to FTC consumer alerts to stay up to date.

To read the full warning, click here. For additional tips on staying protected, click here.

• On February 16, Wired reported various ways individuals can avoid phishing emails and scams, reminding readers that COVID-19-related “phishing scams cropped up quickly worldwide [] shortly after pandemic lockdowns[.]” Wired reminds readers to:
  • Always, always think twice before clicking. Individuals need to “practice skepticism even when things seem find.”
  • Consider the source. Scammers may make communications look like a company you know, so you inadvertently share your personal information.
  • Lock down your accounts. Individuals can increase cybersecurity protections by using a password manager or by enabling two-factor authentication.

To read the full report, click here.