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 28, the Federal Reserve Board requested public comment on proposed changes to its Policy on Payment System Risk (PSR policy) that governs the provision of intraday credit, or daylight overdrafts, to healthy depository institutions with accounts at the Federal Reserve Banks. The proposal would modify the PSR policy to expand access to collateralized capacity, and clarify the terms for accessing and retaining uncollateralized capacity. Comments on the proposed changes are requested within 60 days of publication in the Federal Register, which is expected shortly. For more information, click here.
- On May 28, Richard Cordray, the chief operating officer of the Federal Student Aid at the U.S. Department of Education, announced that the department will reverse a policy put in place during the Trump administration that blocked state and federal regulators from accessing records needed to investigate student loan lenders, servicers, and private collection agencies. For more information, click here.
- On May 27, U.S. Sen. Catherine Cortez Masto (D-NV) introduced a bill seeking to increase the penalties for violations of the Telephone Consumer Protection Act, including possible jail time for those who willfully or knowingly violate the statute, while also increasing the penalty for those who falsify their caller ID information. For more information, click here.
- On May 27, the Consumer Financial Protection Bureau (CFPB) published a report that provides new insights into manufactured housing financing. The report said that low acquisition costs often come coupled with higher interest rates and limited opportunities to refinance. Consumers who do not own the underlying land are more likely to see their homes depreciate and have fewer protections if they fall behind on payments. These factors combined can make this affordable housing a potentially risky avenue for homeownership. The CFPB’s report uses new information collected under the Home Mortgage Disclosure Act to shed light on the experiences of these often-overlooked families. For more information, click here.
- On May 27, the U.S. Treasury released guidance on the Coronavirus State and Local Fiscal Recovery Fund for Non-Entitlement Units (NEU) of Local Government, which provides the steps for states to allocate funds to the NEUs. NEUs are nonmetropolitan cities. The American Rescue Plan Act of 2021 appropriated $19.53 billion for states to disburse to NEUs. For more information, click here.
- On May 26, the U.S. Treasury, the Internal Revenue Service, and the Bureau of the Fiscal Service announced that they have disbursed more than 1.8 million additional Economic Impact Payments under the American Rescue Plan. For more information, click here.
- On May 25, U.S. Sen. Sherrod Brown (D-OH) announced that he is prioritizing legislation that would set a national cap on the amount that lenders can charge in interest. For more information, click here.
- On May 24, the Conference of State Bank Supervisors announced that it is seeking public comment on proposed nationwide licensing requirements for money service businesses (MSB). The proposed structure is based on a single set of nationwide requirements reviewed by a lead state agency. Any remaining state-specific requirements would be limited to items not covered by the national standards. Public comments will be accepted until July 23. For more information, click here.
- On May 24, the U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced that farmers will begin receiving letters alerting them of a new debt relief program. The loan forgiveness could total $4 billion as the government intends to retire bank loans granted to minority farmers with USDA loan guarantees. For more information, click here.
- On May 28, Indiana Governor Eric Holcomb signed Executive Order 21-15, to adjust and lift other requirements beginning June 1, including: removing the indoor mask mandate in state facilities; continuing the face-covering requirements inside Indiana schools through June 30; and, waiving penalties or interest payments accrued on state income taxes on unemployment wages. For more information, click here.
- On May 26, New Jersey Governor Phil Murphy issued Executive Order No. 243, which rescinds the requirement that businesses and nonprofits accommodate telework arrangements for their workforce to the maximum extent practicable and reduce their on-site staff to the minimal number necessary for their operations. Employers bringing employees back to the physical worksite must continue to notify them of on-site exposure and perform employee health screenings of employees entering the worksite. The order further permits employers in indoor worksites that are closed to the public, to allow employees who can verify that they are vaccinated the ability to forego wearing a mask and social distancing. For more information, click here.
- On May 7, the Montana House of Representatives passed a bill that would prohibit discrimination based on vaccination status. The new law bans employers from refusing to employ a person or discriminating against a person in compensation or in a term, condition, or privilege of employment based on the person’s vaccination status or whether the person has an immunity passport. For more information, click here.
- On April 30, a new law passed by the Baltimore City County went into effect, requiring all residential leases to include a provision that late fees may not be imposed until the tenant is more than 10 days past due with For more information, click here.
Privacy and Cybersecurity Activities:
- On May 28, the Federal Trade Commission (FTC) warned consumers that scammers are cashing in on “confusion over vaccine verification methods.” While the Center for Disease Control and Prevention (CDC) has issued vaccination cards, “they were never designed to prove  vaccination status and they may not be enough.” Governments, companies, and other organizations may be developing their products and services. The FTC reminds consumers they should:
- Be skeptical of anyone contacting them from the federal government because there are no official plans to create a national vaccine verification app or certificate passport;
- Check with airlines, cruise lines, and event venues about their requirements before sharing personal information with strangers;
- Contact state government about vaccine verification plans and requirements; and
- Not share information with just anyone, including with connections via social media.
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 by clicking here. To read the FTC’s full warning, click here.
- On May 27, CNBC reported that researchers are finding companies are turning to computer systems to monitor employee performance, “accelerated by the COVID-19 pandemic.” Cybersecurity experts share that the technology may have the benefit of keeping workers safe when working from home; however, workers express they feel “uncomfortable with the likes of camera monitoring or keystroke monitoring.” For those interested in learning more, click here.
- On May 22, it was reported that Utah, Hawaii, and New Jersey had the “highest amount of advertising trackers and cookies over other states” in their COVID-19 websites. In addition, the tracking technology was connected to several major technology companies, primarily those relating to social media. As a result, individuals visiting vaccine portals for these states may end up sharing their internet browsing habits, allowing companies to use the information collected to target for non-COVID-19 related purposes. To read more about the report, click here.