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 October 15, the Department of Education announced the establishment of an Office of Enforcement within Federal Student Aid, reporting directly to the chief operating officer. The Office of Enforcement will be responsible for oversight of enforcement actions against postsecondary schools that participate in the federal student loan, grant, and work-study programs. For more information, click here.
- On October 15, the Department of Education announced that it has awarded contracts to six different companies that will be responsible for servicing and collecting federal student loans. For more information, click here.
- On October 13, the Federal Reserve Board announced that it has joined the Central Bank Network for Indigenous Inclusion, which will foster ongoing dialogue, research, and education to raise awareness of economic and financial issues and opportunities around Indigenous economies. For more information, click here.
- On October 13, the Consumer Financial Protection Bureau (CFPB) announced leadership changes within the Bureau. The positions being announced today are: Deputy Director; Associate Director for Consumer Education & External Affairs; Chief of Staff; and Chief Technologist. For more information, click here.
- On October 12, Rohit Chopra was sworn in as Director of the CFPB. For more information, click here.
- On October 4, the CFPB announced that the deadline to request initial forbearance for loans backed by the U.S. Department of Housing and Urban Development, U.S. Department of Agriculture, or U.S. Department of Veterans Affairs is extended until the COVID-19 National Emergency terminates. The deadline was set for September 30, 2021. For more information, click here.
- On October 3, the Consumer Bankers Association sent a letter to Rohit Chopra, the CFPB Director, in which it urged the CFPB to adopt a larger participant rule for fintech consumer lenders. For more information, click here.
- On October 1, the CFPB published Frequently Asked Questions (FAQs) related to the Limited Content Message and Call Frequency Presumptions included in Regulation F (Reg F). These FAQs are a Compliance Aid designed to help collection agencies comply with Reg F, which goes into effect on November 30, 2021. For more information, click here.
- On October 26, the Maryland Office of the Commissioner of Financial Regulation will host a free online information session for Maryland consumer debt collection agencies. The session will feature a discussion of the CFPB’s debt collection rule, the Maryland Consumer Debt Collection Act, medical debt collection, debt buying, consumer privacy and data security, the State Examination System and the use of technology to improve operations and compliance. For more information, click here.
- On October 26, the Nevada’s Financial Institutions Division is holding a workshop on regulations pertaining to medical debt collections and S.B. 248. The bill requires debt collectors that collect medical debt, as defined in the law, to provide medical debtors with a 60-day notice of placement or assignment before the debt collector takes any action to collect a medical debt. It also prohibits certain practices relating to the collection of medical debt, including restrictions on civil actions to collect medical debt, restrictions on credit reporting medical debt, and restrictions on collection fees (including attorney’s fees) that can be added to medical debt balances. For more information, click here.
- On October 15, Governor of Florida ordered the state to stop assigning accounts to debt collectors in situations where individuals were overpaid unemployment benefits during the COVID-19 pandemic because of issues that occurred as a result of expediting approvals to help those in need. For more information, click here.
- On October 13, Washington D.C. Attorney General Karl Racine “called on 11 hospitals throughout the District to fully comply with new federal hospital regulations that went into effect earlier this year that aim to make the pricing of medical services more transparent and accessible to consumers.” Attorney General Racine stated, “When consumers need critical medical care, they should know exactly what that care will cost them – and it’s up to hospitals to work in consumers’ best interest to make that pricing easily available. We want to make sure District hospitals are complying with new federal regulations that require hospitals to be more transparent with consumers about the cost of services.” For more information, click here.
- On October 8, New York Governor Kathy Hochul signed Senate Bill S737A into law. Among other provisions, S737A requires “debt collectors to inform debtors in each initial communication that written communications are available in large print format” and requires debt collectors to offer alternative forms of communication upon request. For more information, click here.
- On October 6, California Governor Gavin Newsom signed A.B. 424 into law which will become operative July 1, 2022. A.B. 424 would, among other provisions, place new documentation requirements on any collection activity concerning student loans for private lenders. For more information, click here.
Privacy and Cybersecurity Activities:
- On October 15, the Federal Trade Commission (FTC) warned individuals about marketing scams during the 2022 Medicare open enrollment period. Individuals in need of healthcare during the COVID-19 pandemic may face scam-like tactics. Scammers may ask individuals to provide money or certain unnecessary personal information as they sign up for Medicare coverage. For instance, “[s]cammers might call and pretend to be Medicare representatives or agents in an attempt to steal your Medicare number or other personal information.” The FTC reminds individuals:
- Know your rights. “Agents must give you information only about items listed in the scope of appointment form you filled out when you asked for an appointment;”
- Agents can’t set their time limits for enrolling in Medicare;
- Agents can’t threaten to take away your Medicare benefits; and
- Medicare does not endorse or prefer other paid plans.
To read the FTC’s full warning, click here.
- On October 14, the United States National Security Agency [NSA] shared techniques for protecting themselves from phishing scams. As more individuals depend on email and social media to stay connected during the COVID-19 pandemic, “cyber criminals lure individuals to click on malicious links or attachments to collect personal and financial information, and infect your device with [malicious software] and viruses.” The NSA advises individuals that they can stay protected by:
- Ignoring suspicious links or attachments in social media or email;
- Being wary of communications from individuals that push you to act immediately;
- Employing at least 12 character long passwords, and at the very least use different passwords for work and home; and
- Logging out of social media and email when leaving the workplace.
To read the complete advisory, click here.