Troutman Pepper Weekly Consumer Financial Services COVID-19 Newsletter - Consumer Law

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:

Federal Activities

State Activities

Privacy and Cybersecurity Activities

Federal Activities:

On March 1, Federal Housing Finance Agency Director Mark Calabria announced that he authorized the disbursement of $1.09 billion for Fannie Mae and Freddie Mac's affordable housing allocations for 2020. $711 million will go to the U.S. Department of Housing and Urban Development for the Housing Trust Fund, an increase from the $326.4 million disbursed for 2019. The sum of $383 million will go to the Department of the Treasury for the Capital Magnet Fund, an increase from the $175.8 million disbursed for 2019. For more information, click here.
On February 25, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of Currency issued the Shared National Credit Review for 2020. The 2020 review found that credit risk for large, syndicated loans has increased over the last year. For more information, click here.
On February 25, the Secretary of the Treasury Janet Yellen participated in a discussion with a bipartisan group of six mayors from around the country, representing populations of under 80,000 residents. The virtual meeting addressed the unprecedented public health and economic crises that have left millions of Americans struggling, as well as specific challenges facing small towns and rural areas nationwide. For more information, click here.
On February 25, U.S. Department of the Treasury's Community Development Financial Institutions Fund (CDFI Fund) opened the fiscal year 2021 funding round for the CDFI Rapid Response Program today. The program will provide $1.25 billion to community development financial institutions to help their communities respond to the economic hardships created by the COVID-19 pandemic. For more information, click here.
On February 25, a District Court in Texas ruled that the Centers for Disease Control overstepped its authority when it ordered to stop all evictions during the COVID-19 emergency. The court determined that decisions to enact eviction moratoriums rest with the state and not the federal government. For more information, click here.
On February 24, U.S. Senators Mike Crapo (R-ID) and Amy Klobuchar (D-MN) announced they were reintroducing SB-357, the Data Analytics Robocall Technology Act of 2021, or DART Act. SB-357 copies similar legislation that the two senators introduced during the most recent congressional session that passed in the Senate, but not in the House of Representatives. This legislation will establish a pilot program to expand the Federal Communications Commission's (FCC) ongoing attempts to combat computerized calls and task the FCC with reporting to Congress on the effectiveness of call blocking programs. The bill has been referred to the Senate Commerce, Science, and Transportation Committee for consideration. For more information, click here.
On February 22, U.S. Senator Chris Van Hollen re-introduced a bill that will prohibit health care providers and their agents from engaging in "extraordinary collection actions" until the COVID-19 pandemic is over or 18 months after enacting the law. The bill will prohibit selling an individual's debt to another party and reporting adverse information about the individual to consumer credit reporting agencies or credit bureaus. For more information, click here.

State Activities:

On February 26, the New Mexico legislature approved a bill that will provide minimal interest loans to businesses in New Mexico that lost income in 2020. The billauthorizes loans of up to $150,000 to small businesses at rates of less than 2% annual interest with a payback term of up to 10 years. For more information, click here.
On February 25, the Ohio House of Representatives voted unanimously to advance a statute of limitations bill that will reduce the statute of limitation on written and oral contracts to six and four years, respectively, and that will assign consumer transactions a six-year statute of limitation. The bipartisan bill is now headed to Governor Mike DeWine's desk. For more information, click here.
On February 25, Massachusetts Governor Charlie Baker announced Order No. 65, rescinding Order No. 58 as of 12:01 a.m. on March 1, 2021. Under Order No. 65, the entire commonwealth will advance to Phase III, Step 2, and all workplace safety rules for this step will be in effect — specifically, certain indoor performance venues and indoor recreational activities are permitted to resume. In addition to these changes, the governor also announced a new round of COVID-19 business relief grants totaling more than $49 million will be provided to an additional 1,108 businesses. The program — administered by the Massachusetts Growth Capital Corporation — provides financial assistance to businesses impacted by the pandemic to help pay expenses like payroll, benefits, utilities, and rent. For more information, click here.
On February 25, the Oklahoma legislature's Business and Commerce Committee amended a health care debt collection bill. Under the terms of SB-548, unless a medical provider provides a good faith estimate for the services to be rendered, the bill will prevent health care providers from reporting debts to a credit reporting agency or placing them with a collection agency. For more information, click here.
On February 24, a group of small landlord owners filed suit in the Eastern District of New York challenging the constitutionality of New York state's eviction moratorium law. The eviction moratorium law is part of New York state's COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020. For more information, click here.
On February 24, the Arizona Senate transmitted SB-1377 to the Arizona House, moving closer to limiting the liability of businesses that furnish goods or services to consumers. SB-1377 will limit any alleged damages flowing from acts taken in good faith to protect the consumer from injury from the public health pandemic. For more information, click here.
On February 24, the Connecticut House of Representatives passed House Bill 6516 ("An Act Mitigating Adverse Tax Consequences Resulting from Employees Working Remotely During COVID-19, and Concerning the Removal of Liens on the Property of Public Assistance Beneficiaries and a Three-Tiered Grants in Lieu of Taxes Program"). The state Senate must next approve the bill. For more information, click here.
On February 24, Virginia Governor Ralph Northam announced a gradual easing of certain COVID-19-related measures. The governor also announced amendments to Executive Order 72, which aim to safely and gradually ease public health restrictions, including increasing capacity limits in outdoor settings, while still mitigating the spread of COVID-19. Effective March 1, the changes will remain effective through at least April 1, 2021. Mitigation measures may be further eased if key health measures continue to improve. Updated guidelines for specific business sectors can be found here.

Privacy and Cybersecurity Activities:

On February 23, Massachusetts Attorney General Maura Healey and her office held a virtual summit to inform senior citizens how they can protect themselves from scams and identity theft during the COVID-19 public health crisis. AG Healey's Community Engagement Division organized presentations to discuss common scams targeting vulnerable seniors. While many of the scams discussed are not new, AG Healey stated many scams "are on the rise and can harm our elderly residents financially and emotionally[,]" especially those who are isolated and feeling more vulnerable during the COVID-19 pandemic. To learn more, click here.
On February 23, the Cybersecurity and Infrastructure Security Agency (CISA) and an energy company providing energy services to 24 states conducted a virtual tabletop exercise. The exercise aimed to "test and identify the safety procedures [the company] has implemented since the beginning of the COVID-19 pandemic[.]" The exercise included several short- and long-term recovery plans, "business continuity, internal information sharing and communication plans in response to the ongoing COVID-19 pandemic." CISA's deputy executive assistant director stated that "government and businesses alike have had to change the way they do just about everything — from employees working remotely to virtual video conferences to restrictions on in-person meetings. Planning for a [cyber] emergency has had to change as well[.]" To read CISA's announcement, click here. To learn more about tabletop exercises, click here.
On February 23, the Federal Trade Commission announced it will participate in the 23rd Annual National Consumer Protection Week, scheduled to run from February 28 to March 6. The event will include a series of events that will cover a range of topics from coronavirus scams to cyber fraud. To learn more about how the event promotes consumer education and highlights specific consumer protection issues, click here.
On February 22, the Minnesota Consumer Data Privacy Act (MCDPA) was introduced in the Minnesota House of Representatives as HF-1492. The MCDPA will apply to companies doing business in Minnesota, including those that provide products or services to Minnesota residents, so long as these companies: (1) process personal data of at least 100,000 consumers; or (2) generate more than 25% of their gross revenue from the sale of personal data, while also processing the personal data of at least 25,000 Minnesota consumers. The MCDPA will also govern a wide range of activities related to the processing of consumer personal information, including creating a variety of consumer data rights.

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.