Like most industries today, Consumer Finance Services businesses are being significantly impacted by the novel coronavirus (COVID-19). In response, Troutman Pepper 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 stay 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 October 23, the Financial Action Task Force concluded its 32nd plenary meeting and continued to focus on the impact of the COVID-19 pandemic on detecting and countering fraud, including attempts to defraud government-backed stimulus programs. The task force also adopted an updated report on trade-based money laundering and recognized progress by a number of jurisdictions. For more information, click here.
- On October 23, the Federal Reserve and Financial Crimes Enforcement Network (FinCEN) invited comment on a proposed rule change, requiring financial institutions to keep more records on hand related to smaller-value international fund transfers. The current recordkeeping and travel regulations of the Bank Secrecy Act mandate that banks collect, retain, and transmit information on fund transfers of more than $3,000 occurring outside the U.S. But the Fed and FinCEN are proposing to change that threshold to $250, noting the information would help combat illegal activity. For more information, click here.
- On October 23, lawmakers in the House of Representatives introduced a bill to exclude Paycheck Protection Program (PPP) loans from regulators' calculations of the asset size of smaller banks. The legislation would benefit banks and credit unions with assets under $15 billion. It requires federal regulators to exclude PPP loans from asset-size calculations for the purpose of determining capital ratios, deposit insurance premiums, and other asset thresholds at those financial institutions. PPP loans administered by the Small Business Administration would not be excluded from assets on the institutions' quarterly call reports. For more information, click here.
- On October 22, the Federal Trade Commission (FTC) launched a new website, ReportFraud.ftc.gov, where consumers can report fraud and all other consumer issues directly to the FTC. At ReportFraud.ftc.gov, consumers will find a streamlined and user-friendly way to submit reports to the FTC about scams, frauds, and bad business practices — including concerns resulting from the COVID-19 pandemic. For more information, click here.
- On October 21, Governor Lael Brainard, who sits on the Board of Governors of the Federal Reserve System, spoke at the Society of Professional Economists Annual Online Conference at a forum titled, "Post-COVID-Policy Challenges for the Global Economy." He spoke about the initial economic bounce back, and how the bounce back was aided by significant targeted support. For more information, click here.
- On Friday, October 23, Massachusetts Attorney General Maura Healey (AG) moved to dismiss a lawsuit filed in April against her office by ACA International as moot. The ACA International filed the initial suit in the District of Massachusetts in response to the AG's emergency regulations, which attempted to ban outbound collection calls. At the beginning of May, the presiding judge in the case granted a temporary restraining order that restricted the AG's office from enforcing the order until the court could reach a full decision on the merits of the case. The AG's latest argument alleges that the lawsuit is now moot since the controversy is over — in other words the emergency regulations would have expired by now and, therefore, no longer present any justiciable issue. For more information, click here.
- On Friday, October 23, Ohio Senate President, Larry Obhof, and Governor Mike DeWine announced the creation of the "Home Relief" program to assist Ohioans facing evictions, foreclosures, and water service shut-offs during the current COVID-19 pandemic. The federal CARES Act will provide approximately $55 million for this program, and the state Controlling Board expects to meet on Monday, October 26 to approve the funding. For more information, click here.
- On October 17, Maryland's governor issued an executive order providing that until the COVID-19 state of emergency is terminated, (1) foreclosure sales are only valid if the servicer notified the borrower of their rights to request a forbearance, and (2) residential and commercial evictions are prohibited if the tenant can show they suffered a "substantial loss of income." Additionally, until January 4, 2021, the Maryland commissioner of financial regulation must discontinue accepting notices of intent to foreclose. Notices of foreclosure will only be accepted if the lender or servicer certifies that they notified the borrower of their right to request a forbearance. For more information, click here.
- On October 16, the Virginia General Assembly voted to amend VA Code § 8.01-512.4 to extend protection of COVID-19 payments from garnishment and amend the required notice to judgment debtors to inform them of an additional category of exempt funds described as emergency relief payments. The amendment also imposes certain duties on financial institutions that receive such payments directly from the federal government concerning their review and handling of emergency payments — even if payments arecomingled with other funds. Virginia's governor has until October 28 to act on House Bill 5068. For more information, click here.
- On October 16, a court in Hawaii dismissed a legal challenge to Hawaii Governor David Ige's emergency powers. Plaintiffs argued the governor's supplemental emergency proclamations were facially invalid. They sought an order to permanently enjoin the governor from issuing further executive orders or enforcing existing orders. The state argued that no language prohibits supplementary or additional emergency proclamations from being issued. The court agreed with the state. For more information, click here.
- On October 9, a North Carolina court ordered that an insurance company provide business interruption and extra expense coverage to 16 of its restaurant policyholders. The restaurants lost the use of and access to their properties due to local and state COVID-19 civil authority orders. For more information, click here.
Privacy and Cybersecurity Activities:
- On October 23, the FTC shared with consumers tips for
identifying whether a COVID-19 clinical trial is a scam. With
thousands of trials around the country, many illegitimate research
studies are tricking consumers into providing personal information.
The FTC warns consumers that they should:
- do online research on organizations offering clinical trials;
- never pay to be part of a clinical trial without first performing research on the organization;
- not provide social security numbers during recruitment or screening; and
- not share financial information, such as bank account or routing number information.
To read the full advisory, click here.
- On October 21-22, the FTC shared several updates regarding consumer fraud during COVID-19. The FTC released data from the Consumer Protection Data Spotlight, showing a big jump in consumer reports about social media scams. For tips on how to spot, avoid, and report imposter scams, click here. Also, check out the FTC's recently announced fraud reporting platform. The platform will streamline reports to the FTC about scams, frauds, and bad business practices. One of the new features offered by the new platform includes guidance on "next steps from the FTC with advice on what to do based on [a] particular report."
- On October 19, California Attorney General Xavier Becerra urged Facebook, YouTube, and Twitter to "expand efforts to stop the spread of disinformation designed to harm the upcoming U.S. election on their platforms." Becerra warns that "[f]oreign entities and others are discouraging voters by spreading misinformation about the COVID-19 pandemic," among other things. To read the full announcement, click here.
- On October 19, the National Institute of Standards and Technology (NIST) shared tips for securing internet-connected health care devices. With many health care organizations dependent upon internet-connected tools and solutions to provide patient care, NIST shared several resources to assist them in managing privacy risks. Check out those resources by clicking here. To read the full announcement, click here.
The Troutman Sanders' Consumer Financial Services Law Monitor blog offers timely updates regarding the financial services industry to inform you of recent changes in the law, upcoming regulatory deadlines and significant judicial opinions that may impact your business. To view the blog, 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.