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:

Federal Activities

State Activities

Privacy and Cybersecurity Activities

Federal Activities:

• On October 22, the Consumer Financial Protection Bureau (CFPB or Bureau) and U.S. Department of Justice (DOJ), in cooperation with the Office of the Comptroller of the Currency, took action to end alleged redlining by a Tennessee-based bank. The CFPB and DOJ allege that this bank discriminated against Black and Hispanic neighborhoods by deliberately not marketing, offering, or originating home loans to consumers in majority Black and Hispanic neighborhoods. For more information, click here.

• On October 21, the CFPB issued a series of orders to collect information on the business practices of large technology companies operating payments systems in the United States. The information will help the CFPB better understand how these firms use personal payments data and manage data access to users, so the Bureau can ensure adequate consumer protection. For more information, click here.

• On October 18, the Federal Communications Commission proposed a rule that would require mobile wireless providers to block illegal text messaging. For more information, click here.

• On October 18, the Federal Housing Finance Agency announced that desktop appraisals, a temporary flexibility implemented in March 2020 to keep the mortgage industry afloat amid lockdowns and social distancing, will become permanent. For more information, click here.

• On October 18, the CFPB released a Spanish-language translation of its model validation notice, which collectors can choose to use if they elect to do so. For more information, click here.

• On October 18, the Department of Education announced that it would consider proposals that give borrowers flexibility when the moratorium on student loan payments ends on January 31, 2022. For more information, click here.

• On October 12, a group of various consumer protection-related organizations and individuals sent a letter to the CFPB, urging the CFPB to regulate fee-based earned wage access products as credit subject to the Truth in Lending Act. For more information, click here.

State Activities:

• On October 20, Washington State Attorney General Bob Ferguson filed a lawsuit against an Oregon-based company and its owner for illegally robocalling Washingtonians with deceptive recorded messages. The calls attempted to sell a purported robocall-blocking service. For more information, click here.

• On October 19, California Attorney General Rob Bonta issued a press release “urging the Federal Deposit Insurance Corporation, the Federal Reserve, and the Office of the Comptroller of the Currency (collectively, “federal bank regulators”) to explicitly disavow rent-a-bank schemes in their forthcoming guidance for banks on risk management when engaging with third parties.” “Predatory lending and illegal rent-a-bank schemes have no place in our financial system,” said Attorney General Bonta. “I’m joining 20 attorneys general in calling on federal bank regulators to take a stand against this exploitative practice and protect struggling borrowers from being saddled with insurmountable debt.” For more information, click here.

• On October 16, Virginia Attorney General Mark Herring filed lawsuits against 29 Virginia real estate companies and properties managers for allegedly discriminating against prospective tenants who sought rental housing using a common federal subsidy to help pay their rent. For more information, click here.
• Recently, the Massachusetts House held a hearing on HB 312, dubbed “An Act to limit consumer exposure to deceptive calling practices.” The bill, if passed, would allow “aggrieved persons” to pursue “fines of not more than $10,000 per each deceptive call; provided that said fine shall be not less than $5,000 for each deceptive call involving a consumer age 65 years or older.” For more information, click here.

Privacy and Cybersecurity Activities:

• On October 20, California Attorney General Rob Bonta offered donors advice on recognizing and avoiding fraud. “Now, more than ever, the generosity of Californians sustains our communities and state [such as by those] hoping to help those impacted by the COVID-19 pandemic.” To avoid charity fraud, California Rob Bonta warns:

1. Check the organization’s registration status, and ensure it is up to date;
2. Give to organizations you trust, and always do your research before donating;
3. Don’t be pressured by telemarketers, and ask questions before donating;
4. Be cautious of fake websites that might use “slightly” different web addresses to trick donors into believing the charity is legitimate;
5. Be wary of social networking fraud, and recognize that not all online or social media “charities” will be legitimate; and
6. Protect your identity and remember never to give out sensitive personal information (e.g., Social Security number).

To read the full warning, click here.