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:
Privacy and Cybersecurity Activities
- On January 20, President-elect Joe Biden is expected to instruct the U.S. Department of Education to continue excusing borrowers from making payments on their student loans in light of the COVID-19 pandemic. For more information, click here.
- On January 20, President-elect Joe Biden is expected to nominate Rohit Chopra as director of the Consumer Financial Protection Bureau. Chopra is currently a chairman on the Federal Trade Commission. For more information, click here.
- On January 15, Treasury Secretary Steven Mnuchin announced that the Department of the Treasury approved more than $12 billion in payroll support for major passenger air carriers to assist airline industry workers. For more information, click here.
- On January 13, the Small Business Administration reopened the Paycheck Protection Program (PPP) loan portal to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications on Friday, January 15, 2021 at 9 a.m. ET. The portal will open fully on January 19 to all participating PPP lenders to submit First and Second Draw loan applications to the SBA. For more information, click here.
- On January 11, the Federal Reserve Board announced preliminary results indicating that the Reserve Banks provided for payments of approximately $88.5 billion of their estimated 2020 net income to the U.S. Treasury. The Federal Reserve Banks’ 2020 estimated net income of $88.8 billion represents an increase of $33.3 billion from 2019, primarily attributable to a $27.1 billion decrease in interest expense associated with reserve balances held by depository institutions and a $5.3 billion decrease in interest expense associated with securities sold under agreements to repurchase. For more information, click here.
- On January 13, the Colorado legislature introduced a bill extending the moratorium on certain collection actions filed in the state until June 1, 2021. Currently set to expire on February 1, the collection actions subject to the moratorium include garnishment, attachment, and levy. For more information, click here.
- On January 12, the Washington State Collection Agency Board approved a permanent rule allowing employees of licensed collection agencies to work remotely. The temporary guidance was previously set to expire on February 17, 2021. For more information, click here.
- On January 11, Kentucky Governor Andy Beshear signed an executive order that will send $400 checks to unemployed workers who did not qualify for prior federal economic relief. Other workers whose jobless benefits have been delayed could qualify for a one-time $1,000 payment. For more information, click here.
- On January 11, Maryland Attorney General Brian Frosh released a report outlining recommendations to help residents being to recover from the COVID-19 pandemic. The report identifies hurdles residents face to obtain assistance in Maryland courts, including with eviction and garnishment proceedings. For more information, click here.
- On January 7, Minnesota Governor Tim Walz issued an executive order that exempts COVID-19 stimulus payments from execution, including garnishment proceedings. The order also eases the state’s ban on wage garnishments on judgments entered before May 4, 2020. For more information, click here.
- On December 31, 2020, the U.S. District Court for the District of Minnesota dismissed a lawsuit filed by landlords challenging the governor’s moratorium on evicting residential tenants for failure to pay rent during the COVID-19 pandemic. This decision is one of a handful nationwide that upheld statewide eviction moratoriums against legal challenges. For more information, click here.
- On December 17, 2020, the Connecticut Department of Banking extended its no-action memorandum though March 31, 2021 to address licensing issues. The memorandum also includes the temporary mitigation actions licensees must take to continue business during the COVID-19 crisis. For more information, click here.
Privacy and Cybersecurity Activities:
- On January 15, the Federal Trade Commission (FTC) warned consumers that scammers are pretending to represent government agencies to take their money. For instance, the FTC shared that scammers are reaching out to consumers claiming to be FTC Chairman Joe Simons, informing them that coronavirus relief money is on the way, but you need to submit payment to release the funds. The FTC reminded consumers that the Internal Revenue Service — not the FTC — distributes the relief funds. The FTC also shared several tips to protect consumers:
- “Be suspicious of any call, email, text, or letter from a government agency asking for money or information[;]
- Don’t trust caller ID — it can be faked[;]
- Never pay with a gift card or wire transfer[; and]
- Check with the real agency.”
To read more, click here.
- On January 13, the FTC warned business leaders that fraudsters are targeting businesses claiming to offer COVID-19-related government-sponsored loans. In order to apply, scammers request that business leaders provide a name, address, cell phone number, date of birth, and social security number. To protect yourself, the FTC reminds leaders to:
- Check your credit report regularly (the FTC recommends Annual Credit Report.com);
- Seek out reliable sources of information, such as the Small Business Administration’s website); and
- Check out lenders before sharing personal information.
For individuals interested in learning how to spot government imposter scams, click here. To read more about this warning, click here.
On January 13, The Wall Street Journal reported that at least two U.S. federal agencies attempted to distribute COVID-19-related health products from a foreign genetics company, despite warnings that the company presented privacy risks to U.S. residents. For instance, a Federal Bureau of Investigation agent previously warned the Department of Health and Human Services’ advisory committee that this foreign company had previously misused gene-sequencing data. Nonetheless, it appears that federal agencies and company agents approached several states to deploy their “products into government-run laboratories or set up entire labs[.]” The head of Nevada’s COVID-19 task force confirmed that “some of the company’s testing supplies were used in Nevada[.]” To read more about this developing story, click here.