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.
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 November 5, a federal court ruled that the Small Business Administration (SBA) must release detailed information for all loans issued under the Paycheck Protection Program (PPP), including name of borrowers and the loan amounts. The court found that the SBA’s claimed exemptions from the Freedom of Information Act do not cover the PPP data sought by two news organizations. For more information, click here.
- On November 5, the Board of Governors of the Federal Reserve System issued a Federal Open Market Committee (FOMC or Committee) statement. In the statement the Committee acknowledged the economic hardship caused by the COVID-19 pandemic:
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.
For more information, click here.
- On November 4, the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association issued a report to the Secretary of the Treasury. The report stated that “[e]conomic activity rose sharply in the third quarter of 2020, with a 33.1% annualized increase in real GDP. The economy has recovered rapidly from the largest quarterly contraction in post-war history, but real GDP still remains 2.9% below year-ago levels. Going forward, the course of the [COVID-19] virus will play a large role in determining the trajectory of the economy, and increasing virus spread in many parts of the country poses significant near-term downside risk.” For more information, click here.
- On November 5, New York Attorney General Letitia James extended the suspension of debt collection for medical and student debt owed to the state of New York through December 31, in response to financial impacts resulting from the spread of COVID-19. For more information, click here.
- On November 3, the Washington State Department of Licensing Board held a special meeting to review language in its permanent rule on remote work for licensed collection agencies. The original temporary remote work rule was established in June and was confirmed as extending until February 17, 2021. For more information, click here.
- On November 3, Nebraska voters approved a measure setting a 36% annualized percentage rate for payday loans. For more information, click here.
- On November 2, deputy director of housing operations for Sante Fe County, New Mexico, Jordan Barela, announced the Emergency Rental and Mortgage Assistance Program. This program will provide emergency housing assistance grants to qualifying households who: 1) reside in Santa Fe County; 2) have had an adult household member who lost a job, was furloughed, or had a reduction in working hours on or after March 1, 2020; 3) are currently behind on their rent or mortgage payments; and 4) currently have a gross monthly income that falls below 80% of the area median income for Santa Fe County for rental assistance and 100% of the area median income for Santa Fe County for mortgage assistance. For more information, click here.
Privacy and Cybersecurity Activities:
- On November 6, the Cybersecurity and Infrastructure Security Agency (CISA) and industry members of the Information and Communications Technology (ICT) Supply Chain Risk Management (SCRM) Task Force released their report on COVID-19’s impact on ICT global supply chains. The report’s goal was to determine the effects of COVID-19 on ICT and to “make practical recommendations that can support policy and operational decisions to strengthen and build additional resilience into ICT supply chains in the future.” The report found three key issues that impacted the ICT supply chains due to the pandemic:
- The pandemic has underscored the need for an approach that was already underway over the last six years: diversifying supply chains to a broader array of locations and away from single-source/single-region suppliers.
- The pandemic exposed how some manufacturing companies were unprepared because they relied on lean inventory models, which provide great efficiency and cost-effectiveness in typical environments.
- COVID-19 also underscored the difficulties that companies face in understanding their junior-tier suppliers and where they are located.
To read the announcement, click here. For the full report, click here.
- On November 6, the Federal Trade Commission (FTC) reminded consumers of the importance of reporting fraud to the proper authorities. Scammers continue to take advantage of the pandemic, and the best way to fight back is by “sharing your story and reporting what happened” to help friends, family, and others in the community to avoid similar scams. To learn more, view the announcement by clicking here.
- On November 3, voters in California and Michigan approved new privacy regulations. In California, voters approved the California Privacy Rights Act (CPRA) — the successor to the California Consumer Privacy Act (CCPA) — via Proposition 24. Michigan voters also approved Proposal 2, which “amends the Michigan Constitution to protect electronic data and communications in the same way the law protects your home and papers from unreasonable search and seizure.” As individuals continue to depend on technology during the COVID-19 pandemic, these two new laws are sure to affect organizations’ data collection practices across the country.
- On November 2, Securities and Exchange Commission Chairman Jay Clayton spoke about the cyber risks present in corporate America during the COVID-19 pandemic. The SEC has issued several warnings on ransomware, credential compromises, and other forms of cyberattacks. For more information, click here.