Like most industries at present, Consumer Finance Services companies are being considerably impacted by the novel coronavirus (COVID-19). Troutman Pepper has developed a devoted COVID-19 Resource Center to information shoppers by this unprecedented world well being problem. We commonly replace this web site with COVID-19 information and developments, suggestions from main well being organizations, and instruments that companies can use freed from cost.
To make it easier to preserve abreast of related actions, beneath discover a breakdown of a few of the greatest COVID-19 pushed occasions on the federal and state ranges to affect the Consumer Finance Services trade this previous week:
Federal Activities
State Activities
Privacy and Cybersecurity Activities
Federal Activities:
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On April 8, Acting Comptroller of the Currency Michael Hsu mentioned the structure of a U.S. greenback-based mostly stablecoin system and coverage issues relating to stablecoin stability, interoperability, and separability. For extra info, click on right here.
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On April 7, the Consumer Financial Protection Bureau (CFPB) introduced that it’s utilizing its rulemaking authority to suggest that shopper reporting companies (CRAs) don’t forestall human trafficking survivors from reaching monetary independence. The proposed rule would shield human trafficking survivors by stopping CRAs from together with damaging info ensuing from abuse. Congress required the CFPB to situation guidelines as a part of the just lately enacted Debt Bondage Repair Act. For extra info, click on right here.
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On April 7, Secretary of the Treasury Janet Yellen addressed the Biden administration’s forthcoming legislative method to digital belongings, as we mentioned right here, in addition to the digitization of the American financial system, which Yellen assessed by the lens of 5 classes she suggests are sometimes implicated by rising applied sciences typically: (1) accountable innovation; (2) applicable guardrails; (3) financial sovereignty; (4) technological neutrality; and (5) interagency and worldwide collaboration. For extra info, click on right here.
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On April 6, the U.S. Department of Education introduced an extension of its pause on pupil mortgage compensation, curiosity, and collections by August 31, 2022. For extra info, click on right here.
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On April 6, the CFPB printed a report, displaying that few payday mortgage debtors profit from no-price prolonged cost plans, which should be provided to debtors within the majority of states that don’t prohibit payday lending. Instead of utilizing the cost plans, debtors proceed to pay for expensive mortgage rollovers. While no-price prolonged cost plans are supposed to assist debtors exit the cycle of rollovers and costs, the payday enterprise mannequin continues to rely on excessive rollover charges and costs. For extra info, click on right here.
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On April 6, the Federal Housing Finance Agency introduced that Fannie Mae and Freddie Mac would require servicers to droop foreclosures actions for as much as 60 days if the servicer has been notified {that a} borrower has utilized for help from the Treasury Department’s Homeowner Assistance Fund. For extra info, click on right here.
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On April 6, Senator Pat Toomey (R-PA) launched a draft of the Stablecoin Transparency of Reserves and Uniformed Safe Transactions Act, additionally referred to as the Stablecoin TRUST Act of 2022. The invoice features a definition of “payment stablecoin,” which should be convertible on to fiat foreign money and its backing should be with belongings “with a market value equal to not less than 100 percent of the par value of the payment stablecoins outstanding” and “that are cash and cash equivalents or level 1 high-quality liquid assets denominated in United States dollars.” For extra info, click on right here.
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On April 5, the Federal Reserve Board introduced that it had prohibited six former financial institution staff from future employment within the banking trade for fraudulently acquiring loans and grants administered below the Coronavirus Aid, Relief, and Economic Security (CARES) Act. For extra info, click on right here.
State Activities:
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On April 7, the New York Department of Financial Services issued steerage “to address potential confusion” about how you can adjust to a brand new statute of limitations requirement that went into impact final week. The new requirement would decrease the statute of limitations interval to 3 years, whereas additionally disallowing a partial cost to restart the statute of limitations and requiring extra disclosures to be made. For extra info, click on right here.
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On April 6, New York Attorney General Letitia James introduced a lawsuit towards a legislation agency and its companions for “engaging in deceptive rent collection practices and initiating frivolous lawsuits against New York tenants.” The lawsuit was filed after the legal professional common’s workplace investigated the agency and located it “did not conduct any meaningful reviews of their non-payment eviction cases before filing litigation, resulting in the distribution of deceptive rent collection letters, unnecessary legal actions against tenants, and improper evictions without cause.” Attorney General James’ workplace claims the conduct “violates New York Executive Law, the Federal Debt Collection Practices Act, and the New York General Business Law.” For extra info, click on right here.
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On April 6, California Attorney General Rob Bonta, as a part of a multistate coalition of 17 attorneys common, urged the nation’s largest banks to get rid of overdraft charges. According to the press launch, “U.S. consumers paid an estimated $11 billion in overdraft fees in 2019, with the financial burden disproportionately falling on low-income consumers and consumers of color.” In assist of the request, Attorney General Bonta acknowledged, “For banks, overdraft fees are easy way to pad their profits, but for struggling consumers, these fees can seriously derail their financial plans.” For extra info, click on right here.
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On March 24, Utah’s governor signed the Commercial Financing Registration and Disclosure Act (CFRDA) into legislation. Under the CFRDA, starting January 1, 2023, business financing suppliers should register with the Utah Department of Financial Institutions and supply sure disclosures. These disclosures embrace the quantity of funds offered to the enterprise, the overall quantity to be paid to the supplier, and details about the prices or reductions related to the prepayment. For extra info, click on right here.
Privacy and Cybersecurity Activities:
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On April 6, the Department of Human Health and Services (HHS) issued a request for info, searching for enter on two necessities of the Health Information Technology for Economic and Clinical Health Act of 2009 (HITEACH Act), as amended in 2021. Specifically, HHS seeks touch upon Section 13412 and Section 13410(c)(3). Section 13412 requires the HHS to think about sure acknowledged safety practices of lined entities and enterprise associates when figuring out potential fines, audit cures, or different cures for resolving potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Section 13410(c)(3) requires the HHS to ascertain a technique to find out potential civil financial penalties and settlement sharing for people harmed by a possible violation of the HIPAA Privacy, Security, and/or Breach Notification Rules. For extra info, click on right here.
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On April 7, California Attorney General Rob Bonta introduced a brand new partnership with the Federal Communications Commission (FCC) on robocall investigations to guard customers and companies from scams and monetary loss. This partnership establishes vital info sharing and cooperation constructions to analyze spoofing and robocalls rip-off campaigns. For extra info, click on right here.