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:
- On March 12, the U.S. Department of the Treasury announced that American Rescue Plan Economic Impact Payments will begin rolling out to millions of Americans in the coming weeks. For more information, click here.
- On March 11, President Joe Biden signed the $1.9 trillion American Rescue Plan Act into law, which will send aid to millions of Americans impacted by the COVID-19 pandemic. The American Rescue Plan provides $1,400 direct payments to individuals making up to $75,000 annually, $350 billion in aid to state and local governments, and $14 billion for vaccine distribution. The bill also provides $130 billion to elementary, middle, and high schools to assist with safe reopening. For more information, click here.
- On March 11, the Consumer Financial Protection Bureau (CFPB or Bureau) announced it is rescinding its January 24, 2020 policy statement, "Statement of Policy Regarding Prohibition on Abusive Acts or Practices." Going forward, the CFPB intends to exercise its supervisory and enforcement authority consistent with the full scope of its statutory authority under the Dodd-Frank Act as established by Congress. The CFPB stated that the 2020 policy statement was inconsistent with the Bureau's duty to enforce Congress's standard, and rescinding it will better serve the CFPB's objective to protect consumers from abusive practices. For more information, click here.
- On March 9, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency announced an interim final rule that supports the Treasury Department's implementation of the Treasury Department's Emergency Capital Investment Program established by Congress to make capital investments in minority depository institutions and community development financial institutions. Under the program, Treasury will purchase preferred stock or subordinated debt from qualifying minority depository institutions and community development financial institutions, with the corresponding dividend or interest rate based on the institution meeting lending targets. For more information, click here.
- On March 8, the Federal Reserve Board announced it will extend its Paycheck Protection Program Liquidity Facility (PPPLF) by three months to June 30. The extension will provide continued support for the flow of credit to small businesses through the Paycheck Protection Program. For more information, click here.
- On March 3, Congressman Greg Stanton introduced a bill into the U.S. House of Representatives that seeks to amend the Fair Credit Reporting Act to exclude COVID-19-related evictions from consumers' credit reports. Under the proposed bill, any eviction, information related to eviction, or proceedings seeking eviction would be prohibited from being reported on consumers credit reports if it occurred between March 13, 2020 and 120 days after President Biden rescinds the national emergency declaration. For more information, click here.
- On March 9, Georgia Supreme Court Chief Justice Harold D. Melton issued an order lifting the suspension of jury trials in Georgia "effective immediately." After initially issuing the statewide judicial emergency on March 14, 2020, trial courts may resume jury trials "if that can be done safely and in accordance with a final jury trial plan developed in collaboration with the local committee of judicial system participants and incorporated into the court's written operating guidelines for in-person proceedings." For more information, click here.
- On March 9, state regulators from California, Colorado, Connecticut, Illinois, Maine, Massachusetts, New Jersey, Rhode Island, Washington, and Wisconsin signed a letter directed to the Department of Education asking for a reversal of policies implemented during President Trump's administration. Citing a need to "weather the current public health and economic crises," the states asked the Department of Education to reverse using the Privacy Act of 1974 to preclude state regulators from obtaining documents needed for regulatory oversight and to reverse federal preemption of oversight for student loan account servicers. For more information, click here.
- On March 5, the Nevada Financial Institutions Division (NFID) extended temporary guidance for licensees regarding working from home until May 31. The NFID emphasized that it may not extend this guidance past May, so "it is imperative that the collection agency begin making plans to ensure it can both comply with Nevada law and the laws of the other jurisdictions it does business in." For more information click here.
- On March 5, Illinois Governor J.B. Pritzker issued an executive order extending the suspension of garnishment, deduction of wages, and post-judgment citations to discover assets through April 3. The new executive order extends protections originally put in place on April 14, 2020 by Executive Order 2020-25. For more information, click here.
- On March 13, The Economist published a couple of articles questioning the usefulness and efficacy of COVID-19 vaccine "passports." For individuals to show a willingness to adopt vaccine passports, The Economist argues that passports "must be trustworthy." For instance, researchers that examined "Israel's app found several flaws. Problems with the first version of the app meant that clever fraudsters could sell fake certificates online." The Economist further argues that vaccine passports may be limited to specific circumstances, such as international travel and certain employment contexts. Considering the Centers for Disease Control and Prevention's recent guidance for vaccinated persons, businesses will need to determine whether vaccination passports are appropriate to maintain their unique day-to-day operations. To learn more about compliance issues for companies making or using vaccine applications, check out Troutman Pepper's Law360 article by clicking here.
- On March 12, the Federal Trade Commission (FTC) warned consumers that scammers will follow, and try to take advantage of, the new COVID-19 rescue plan. The FTC reminds consumers that the government will never ask them to pay anything upfront in any form to obtain stimulus money. The FTC also states the government will not call, text, email, or directly message consumers to ask for Social Security numbers, bank account information, or other financial information. To read the full announcement, click here.
- On March 10, Reuters reported that immigration officials in one of the world's busiest airports is "uncovering fake COVID-19 test results daily[.]" Officials state delays are inevitable because "[i]t is almost impossible to tell whether [a test result] is fake or not except by going through a lengthy and almost impossible verification process[.]" While airline carriers have adopted applications to verify COVID-19 results, airlines state they still need "guidance on how to authenticate test results and still protect passengers' privacy." To learn more about companies' efforts to verify test results and vaccination status, read Troutman Pepper's Law360 article by clicking here.
- On March 9, the FTC offered guidance to consumers who may have received a bill for a Small Business Administration (SBA) loan but didn't apply for one. For businesses, the FTC advises they should report the problem right away and to keep invoices sent by the SBA while reviewing identity theft reports. For victims where fraudsters have used their personal information, the FTC advises they should visit this webpage to report activity or to acquire additional guidance.
- On March 9, the Office for Civil Rights at the U.S. Department of Health and Human Services (HHS) announced an extension of the public comment period relating to proposed modifications to the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule. The changes would "include strengthening individuals' rights to access their own health information, including electronic information, improving information sharing for care coordination and case manage, [as well as] enhancing flexibilities for disclosures in emergency or threatening circumstances[,]" such as the COVID-19 pandemic. For those interested in submitting a public comment, click here. To read the full announcement, click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.