Troutman Pepper Weekly Consumer Financial Services COVID-19 Newsletter – April 2022 #2 | Troutman pepper

Like most industries today, consumer credit services businesses are significantly impacted by the novel coronavirus (COVID-19). Troutman Pepper has developed a COVID-19 Resource Center to guide customers through this unprecedented global health challenge. We regularly update this site with news and developments on COVID-19, recommendations from leading health organizations, and tools businesses can use for free.

To help keep you up to date on 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 consumer credit services industry. last week :

Federal activities

State activities

Privacy and cybersecurity activities

Federal activities:

  • On April 8, Acting Comptroller of Currency Michael Hsu discussed the architecture of a US dollar-based stablecoin system and policy considerations regarding the stability, interoperability, and separability of stablecoins. For more information, click here.

  • On April 7, the Consumer Financial Protection Bureau (CFPB) announced that it was using its regulatory power to propose that consumer reporting agencies (CRAs) not prevent survivors of human trafficking from achieve financial independence. The proposed rule would protect survivors of human trafficking by preventing CRAs from including negative information resulting from abuse. Congress has required the CFPB to enact rules under the recently enacted debt bondage relief act. For more information, click here.

  • On April 7, Treasury Secretary Janet Yellen addressed the Biden administration’s next legislative approach to digital assets, as we discussed it. here, as well as the digitalization of the US economy, which Yellen assessed through the lens of five lessons she suggests are often implied by emerging technologies in general: (1) responsible innovation; (2) appropriate guardrails; (3) monetary sovereignty; (4) technological neutrality; and (5) interagency and international collaboration. For more information, click here.

  • On April 6, the U.S. Department of Education announced an extension of its pause on student loan repayment, interest, and collections until August 31, 2022. For more information, click here.

  • On April 6, the CFPB released a report, showing that few payday loan borrowers are benefiting from no-cost extended repayment plans, which must be offered to borrowers in the majority of states that do not ban payday lending. . Instead of using payment plans, borrowers continue to pay for expensive loan rollovers. While fee-free extended payment plans are intended to help borrowers break out of the cycle of rollovers and fees, the payday business model continues to depend on high rollover rates and fees. For more information, click here.

  • On April 6, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will require repairers to suspend foreclosure activities for up to 60 days if the repairer has been notified that a borrower has requested assistance from the Treasury Department Homeowners Relief Fund. For more information, click here.

  • On April 6, Sen. Pat Toomey (R-PA) released a draft Stablecoin Transparency of Reserves and Uniformed Safe Transactions Act, also known as the Stablecoin TRUST Act of 2022. The bill includes a definition of “stablecoin payment,” which must be convertible directly into fiat currency and its backing must consist of assets “with a market value equal to at least 100% of the face value of the payment stablecoins in circulation” and “that are cash and cash equivalents cash or high-quality Level 1 liquid assets denominated in United States dollars. For more information, click here.

  • On April 5, the Federal Reserve Board announced that it had barred six former bank employees from future employment in banking for fraudulently obtaining loans and grants administered under the CARES Act ( Coronavirus Aid, Relief, and Economic Security). For more information, click here.

State activities:

  • On April 7, the New York Department of Financial Services released guidance “to avoid potential confusion” on how to comply with a new statute of limitations requirement that went into effect last week. The new requirement would reduce the statute of limitations to three years, while also prohibiting partial payment to restart the statute of limitations and requiring additional information to be provided. For more information, click here.

  • On April 6, New York Attorney General Letitia James announced a lawsuit against a law firm and its partners for “engaging in deceptive rent collection practices and frivolous lawsuits against New York tenants”. The lawsuit was filed after the attorney general’s office investigated the company and found that it “did not conduct any meaningful review of their non-payment eviction cases before filing a complaint, resulting in distributing misleading rent collection letters, unnecessary lawsuits against tenants, and wrongful evictions without cause. of Debt Collection and the General Business Law of New York”. For more information, click here.

  • On April 6, California Attorney General Rob Bonta, as part of a multistate coalition of 17 attorneys general, urged the nation’s largest banks to eliminate overdraft fees. According to the press release, “U.S. consumers paid approximately $11 billion in overdraft fees in 2019, with the financial burden falling disproportionately on low-income consumers and consumers of color.” In support of the claim, Attorney General Bonta said, “For banks, overdraft fees are an easy way to boost their profits, but for struggling consumers, these fees can seriously derail their financial plans. . For more information, click here.

  • On March 24, the Governor of Utah signed into law the Commercial Finance Registration and Disclosure Act (CFRDA). Under the CFRDA, effective January 1, 2023, commercial finance providers must register with the Utah Department of Financial Institutions and provide certain information. These disclosures include the amount of funds provided to the business, the total amount to be paid to the vendor, and information about any costs or discounts associated with the prepayment. For more information, click here.

Privacy and cybersecurity activities:

  • On April 6, the Department of Human Health and Human Services (HHS) issued a request for information, seeking comments on two requirements of the Health Information Technology Act of 2009 for economic health and Clinic (HITEACH Act), as amended in 2021. Specifically, HHS invites comments on Section 13412 and Section 13410(c)(3). Section 13412 requires HHS to consider certain accepted security practices of covered entities and business associates when determining potential fines, audit remedies, or other remedies to address potential violations of law. HIPAA (Health Insurance Portability and Accountability Act) of 1996. Section 13410(c)(3) requires HHS to establish a methodology for determining potential civil monetary penalties and settlement sharing for those harmed by a potential rule violation Privacy, Security, and/or HIPAA Violation Notification. For more information, click here.

  • On April 7, California Attorney General Rob Bonta announced a new partnership with the Federal Communications Commission (FCC) on robocall investigations to protect consumers and businesses from scams and financial loss. This partnership establishes essential information sharing and cooperation structures to investigate identity theft and robocall campaigns. For more information, click here.