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Troutman Pepper’s COVID-19 Consumer Financial Services Weekly


Like most industries today, consumer finance service companies are significantly affected by the novel coronavirus (COVID-19). Troutman Pepper has developed a 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 healthcare organizations, and tools businesses can use for free.

Our banking and loan clients are also facing new challenges affecting their industry as a result of COVID-19, especially the ever-changing rules and regulations around evictions and foreclosures. We are following these updates closely and have assembled an interactive tracking tool containing state orders and guidance material regarding residential lockdowns and eviction moratoria. You can access this interactive tool at https://covid19.trutman.com/.

To help you stay on top of relevant activities, below is a breakdown of some of the biggest COVID-19-related events at the federal and state levels that have impacted the fundraising services industry. consumption last week:

Federal activities

Federal activities:

  • On May 13, the United States House of Representatives passed the Comprehensive Debt Collection Improvement Act, a package of bills aimed at reforming the way debt is collected. The bill is now sent to the Senate for consideration. For more information, click here.
  • On May 14, the Federal Reserve Board (Board) announced the third extension of a rule to strengthen the effectiveness of the Small Business Administration’s Paycheck Protection Program (PPP). Like the previous extensions, this will temporarily change the rules of the Board so that certain directors and shareholders of banks can apply to their banks for PPP loans for their small businesses. For more information, click here.
  • On May 13, the US Department of the Treasury announced that it had distributed $ 742 million to 42 states and three territories through the Homeowner Assistance Fund (HAF). As part of the US bailout, HAF seeks to prevent mortgage defaults and defaults, foreclosures, loss of utilities or home energy services, and displacement of homeowners facing financial hardship due to the pandemic of COVID-19. For more information, click here.
  • On May 12, the Senate Trade Commission (FTC) voted in favor of appointing Lina Khan as Commissioner of the Federal Trade Commission. Previously, Khan served as legal counsel to former FTC commissioner Rohit Chopra. For more information, click here.

State activities:

  • On May 13, the California Senate passed a bill that will require the original creditor or owner of a debt to notify a consumer within five days of selling or assigning the debt to someone else. other, while also giving consumers the right to request certain information. Debt collectors, such as debt status or date of last payment, among other pieces of information. For more information, click here.
  • On May 13, the Nevada Financial Institutions Division (NFID) extended its temporary guidelines allowing employees of licensed collection agencies to work from home until July 31. The directives were previously scheduled to expire on May 31. For more information, click here.
  • On May 12, a bill was introduced in the New Jersey Senate that would provide financial relief to homeowners and tenants in response to the COVID-19 pandemic. Among other measures, the bill “would prohibit a landlord from providing information on non-payment or late payment of rent accrued during the period covered, or other legal records or proceedings relating to non-payment or payment. late payment of the rent accrued during the period covered. period, directly to another homeowner, or to a debt collection or credit reporting agency. For more information, click here.
  • On May 12, Oregon HB 2009 passed through the Housing and Development Committee. The bill “establishes temporary limitations on the remedies of lenders in the event of non-payment by borrowers of obligations secured by mortgages, deeds of trust or contracts for the sale of land for certain real estate” because of “the loss of income related to the COVID-19 pandemic. “For more information, click on here.
  • On May 10, the Nevada Assembly Committee on Commerce and Labor submitted recommendations to SB 248, which limits a collection agency’s ability to collect medical debts. The proposed changes include changing the definition of medical debt, allowing medical debtors to establish contacts and make voluntary payments, and prevent certain written communications from being sent by certified mail. For more information, click here.
  • On May 10, the Maine Senate Committee on Credit and Financial Affairs received a bill establishing a homeowner’s assistance fund program using funds received under the American Rescue Plan Act of 2021 to “prevent payment defaults and defaults, foreclosures, loss of utilities or household energy services. and travel by owners in financial difficulty. The bill invokes an emergency clause which takes effect upon approval. For more information, click here.

Privacy and cybersecurity activities:

  • On May 10, California Attorney General Rob Bonta joined a coalition of 43 state attorneys general to sign a letter to Facebook CEO Mark Zuckerberg urging Facebook to abandon plans to launch a version of Instagram for children under 13. . The letter notes that Facebook has historically failed to protect the welfare of minors who use its products. The coalition’s action shows the growing trend to add additional privacy protections for minors. For example, this trend can be seen in the California Consumer Privacy Act (CCPA) – see Troutman Pepper’s series on CCPA compliance, including provisions on minor privacy protections, available here.
  • On May 14, US Secretary of Commerce Gina Raimondo and US Secretary of Homeland Security Alejandro Mayokras co-wrote an editorial in CNBC, detailing the impact of the Colonial Pipeline ransomeware attack and how this attack creates a learning opportunity for organizations to improve their cybersecurity defenses. The editorial states that more than $ 350 million in ransom was paid to attackers in 2020 – an increase of over 300% from the previous year – with an average payment of over $ 300,000. Further, the editorial noted that according to a 2021 report, the highest number of casualties in 2020 by industry were in manufacturing, professional and legal services, and construction. The co-authors also discussed the practice guidelines and linked to a Guide from the National Institute of Standards and Technology (NIST) of the Department of Commerce to help fight ransomeware attacks. In our article here, Troutman Pepper explains how business leaders can reduce the cyber risks of their organizations.
  • On May 12, President Joe Biden signed a decree intended to improve cybersecurity practices in the United States and protect federal government systems. The executive order calls for collaboration between the federal government and the private sector to address the “persistent and increasingly sophisticated malicious cybercampaigns” that threaten the security of the United States. Some specific steps outlined by the decree include:
    • Create a standardized manual for federal responses to cyber incidents;
    • Establish a “Cyber ​​Security Review Board” composed of public and private sector officials, which should meet after major cyber attacks to provide analysis and recommendations; and
    • Improve the security of software sold to the government, including by requiring developers to share certain security data with the public.

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