In the world of consumer financial services, there are myriad legislative, regulatory and enforcement, and executive actions likely to be prioritized by the Biden-Harris administration in 2021.

These include those that are directly related to the continuing impact of the pandemic and the relief afforded consumers under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of 2020 and the American Rescue Plan of 2021. Specifically, this includes mortgage forbearance, foreclosure and eviction moratoria, credit reporting, debt collection, and bankruptcy issues. An uptick in regulatory and enforcement activity in the FinTech space is also likely given the number of consumers who pivoted to on-line and mobile banking during the pandemic.

With Democrats now in control of the House, Senate, and the White House, combined with COVID-19's effect of consumer lending, we expect there to be a heightened focus on consumer issues at every level. This includes CFPB regulatory and enforcement activity, as well as broad sweeping legislative reform/activity.

In a December 4, 2020 letter to then President-Elect Joe Biden, Chairwoman of the Committee on Financial Services Representative Maxine Waters set forth fourteen pages of actions the new Biden-Harris administration should take, including a full list of regulatory and administrative acts that should be prioritized. With that in mind, President Biden has appointed Rohit Chopra, a longtime consumer advocate, to head the Consumer Financial Protection Bureau (CFPB). Although Mr. Chopra, former assistant director of the CFPB during the Obama Administration and current FTC Commissioner, awaits Senate Confirmation, his track record and views on consumer issues are well known in Washington. Based on what we understand his priorities to be, we can expect Mr. Chopra to focus the Bureau's attention on aiding consumers who have been harmed financially during the COVID-19 pandemic, which means mortgage servicers, credit bureaus, debt collectors, and auto lenders are all likely targets of enforcement actions. Under Chopra's leadership, financial services companies should brace for increased CFPB enforcement and potentially greater penalties and fines.

We anticipate an uptick in CARES Act and American Rescue Plan-related consumer financial services litigation resulting from the interpretation and application of the consumer relief afforded by both statutes.

As vaccines become more readily available and the eviction and foreclosure moratoriums are lifted, we are likely to see a high volume of claims filed, both on behalf of consumers and lenders and/or servicers. Consumers are likely to initiate litigation challenging lenders' and servicers' interpretation and application of relief available under the CARES Act, including mortgage forbearance, debt collection, and credit reporting issues. Lenders and servicers are likely to once again initiate foreclosure and debt collection litigation across the country, which have been stayed across the country for over a year now.

Despite the passage of the American Rescue Plan of 2021 and accelerated vaccine rollout, many businesses will continue to struggle and will not be able to avoid bankruptcy in 2021.

As already mentioned, the Biden Administration is likely to move to strengthen consumer regulations generally. These efforts will likely include a focus on FinTech given its ability to partner with financial services companies to expand access to banking and investment products, both of which may ultimately shrink the racial wealth gap—a stated goal of the Biden Administration. FinTech applications are easily accessible and result in lower consumer fees. However, there's a current lack of clarity as to the applicable regulatory landscape and a real need for legislative action. We can expect the Biden Administration to work toward implementing a federal regulatory framework for the industry which would likely result in increased transparency for consumers and heightened compliance obligations for FinTech companies.

With consumers shifting to a variety of FinTech applications to pay for purchases, pay bills, loan money, or invest in the stock market during the pandemic, we anticipate there will be a heightened focus on the industry by regulators as well as a business need to better understand the evolving regulatory landscape and compliance obligation.

While certain industries have been able to creatively navigate the pandemic and avoid resorting to bankruptcy by obtaining stimulus funds and moving from brick and mortar to on-line or delivery/carry out platforms, many have not. Certain industries were hit much harder than others and will continue to bear the brunt in 2021. Retail, hospitality, entertainment, and energy sectors were hit the hardest in 2020, and have yet to recover in 2021. Employees in these industries contributed to the record unemployment numbers the nation experienced during the pandemic.

As CARES Act relief expires in 2021, and the moratoriums on foreclosures and evictions expire, we expect to see a dramatic increase in consumer filings, particularly in chapter 7 filings among the unemployed.

In 2020, the we saw a record number of retail establishments file for bankruptcy, besides thousands of store closings. Both the retail and energy sectors were struggling before Covid, and the pandemic accelerated their decline. While some of these bankruptcies were largely related to the industry's overall shift to e-commerce and a move away from brick and mortar establishments, and the complications resulting from the same, many were simply due to the lack of consumer spending. The ripple effects of closures are felt throughout the industry: lease defaults, layoffs, and lack of traffic and multi-use facilities.

While certain travel-related sectors like airlines managed to sustain because of the direct aid provided by the CARES Act, related sectors such as hotels and car rental companies have not. This trend will probably continue in 2021. We also expect to see continued distress in sectors mostly dependent on consumers' physical presence, including fitness centers, restaurants, and cinemas. Finally, and somewhat ironically, we expect to see continued distress in the health care industry. Due to continued rise in costs and a decrease in reimbursement rates, the health care industry was suffering before the pandemic. And the pandemic caused cancellation of elective procedures and displacement of "non-essential" health care workers.

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