Troutman Pepper Consumer Financial Services COVID-19 Weekly Bulletin – May 2022 #3 | Troutman pepper


Like most industries today, consumer credit services businesses continue to be significantly impacted by COVID-19. To help you keep abreast of relevant activities, below is a breakdown of some of the biggest federal and state legislative and regulatory events impacting the consumer credit services industry during the week. last :

Federal activities

State activities

Privacy and cybersecurity activities

Federal activities:

  • On May 12 and 10, the House Financial Services and Senate Banking Committees, respectively, held hearings with Secretary to the Chair of the Financial Stability Oversight Council (FSOC), Yellen, to discuss the report. annual FSOC to Congress. Digital assets were at the forefront, in particular the need for a federal regulatory framework for stablecoins. For more information, click here.
  • On May 11, the US Senate voted 51 to 50 to confirm Alvaro Bedoya as a member of the Federal Trade Commission, demanding that Vice President Kamala Harris cast the deciding vote. Bedoya gives Democrats a 3-2 majority in the consumer protection agency. For more information, click here.
  • On May 9, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion saying that the Equal Credit Opportunity Act prohibits lenders from discriminating against customers after they have received a loan, and not just during the application process. For more information, click here.
  • On May 9, the Board of Governors of the Federal Reserve System released its May 2022 Financial Stability Report, which notably highlighted that stablecoins are a risk area in the current financial system and discussed the bank’s digital currencies. (CBDC), noting the “Federal Reserve does not intend to proceed with issuing a CBDC without clear support from the executive branch and Congress, ideally in the form of specific authorizing legislation . For more information, click here.
  • On May 6, the CFPB released its 2021 Fair Lending Report. As with the 2020 report, released last year, the CFPB shows it remains focused on what it calls “financial inclusion, racial and economic equity and fair competition”. The 2021 report also makes several important mentions of the use of artificial intelligence and machine learning. For more information, click here.
  • On May 3, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac companies will require lenders to use the Supplemental Consumer Information Form (SCIF) as part of the application process for loans that will be sold to businesses. SCIF intends to collect information on the borrower’s language preference, if any, and any housing training or counseling received by the borrower, so that lenders can better understand the borrower’s needs. during the home buying process. For more information, click here.

State activities:

  • On May 13, Arizona Attorney General Mark Brnovich announced a consent judgment against the owner and director of a group of debt collection companies. The judgment permanently prohibits the owner “from participating in any debt collection activity”, requires him to “pay more than $1.6 million for restitution to the consumer” and “includes up to $900,000 in civil penalties”. The attorney general’s office alleged that the companies were “calling consumers and misrepresenting and threatening, convincing people to pay debts they had no authority to collect.” The companies allegedly posed as law enforcement officers, government officials, bailiffs and law firm staff to scare or intimidate consumers into paying their alleged debts. For more information, click here.
  • On May 13, New York Attorney General Letitia James issued a consumer alert providing “guidance to protect the privacy of individuals seeking abortion care and prevent digital tracking and unwanted data sharing” . The alert says that “online platforms and consumer apps, such as those widely used to track fertility and menstrual cycles, collect and share consumers’ personal information,” and that “information may then be used against individuals.” seeking abortion care or those assisting them without their knowledge. State Senator Liz Krueger says, “I am working with Attorney General James and my colleagues on legislation to strengthen privacy protections, and I commends the Attorney General for taking this proactive step and providing patients with valuable information on how to better secure their personal information.For more information, click here.
  • On May 12, California Attorney General Rob Bonta released a statement on the Los Angeles Superior Court’s decision to uphold the constitutionality of Senate Bill 10 (SB 10), which “allows local governments to rezone transit-rich areas or urban infill sites for denser housing, regardless of existing zoning restrictions.” Attorney General Bonta said, “Laws like SB 10 are critical to addressing California’s housing shortage and affordability crisis, providing local governments with an important tool to increase housing supply in their communities. Attorney General Bonta then referred landlords and tenants to his Housing Strike Force and Housing Portal – created last November. For more information, click here.
  • On May 12, Maryland’s Commissioner of Financial Regulation issued an advisory titled “Industry Advisory Regulatory Guidance,” which interprets a Federal Court of Appeals ruling and orders lenders and managers to review their billing practices. loan payment fees to borrowers. In the notice, the commissioner warns that affected regulated entities should consider whether refunds may be warranted under the new interpretation. For more information, click here.
  • On May 3, the New York State Senate passed S5473D, which will apply immediately to all actions “in which a final judgment of foreclosure and sale has not been executed.” (To see S5473D at s. 10.) This means that the new law applies retroactively, affecting future foreclosure actions and existing foreclosures, including those in which a foreclosure and sale judgment has been entered, but sale to auction has not yet taken place. Essentially, the bill seeks to overturn the well-reasoned decision of the New York Court of Appeals in Freedom Mtge. against Engel, 37 NY3d 1 (2021), and retroactively revokes lenders’ longstanding right to revoke their option to accelerate post-default mortgages. The bill — which we anticipate Governor Hochul will sign into law — seeks to accomplish this by amending several statutes that govern foreclosures under New York law. For more information, click here.

Privacy and cybersecurity activities:

  • On May 10, Connecticut Governor Ned Lamont signed legislation regarding personal data privacy and online surveillance, making Connecticut the fifth state in the nation to adopt a comprehensive privacy regime. This legislation closely resembles the comprehensive laws passed in Virginia and Colorado and will take effect July 1, 2023. Connecticut’s law does not include a private right of action and provides a temporary 60-day right to remedy the situation on December 31, 2024. For more information, click on here.
  • On May 11, the Digital Privacy Technologies Promotion Act (HR 847) was passed by the U.S. House of Representatives by a vote of 401 to 19. The Act aims to “support research into technologies that enhance confidentiality and to promote responsible use of data”. Notably, this legislation would require the director of the National Institute of Standards and Technology (NIST) to work with private, public, and academic stakeholders to develop “privacy-enhancing technologies” and “technical standards, guidelines, methodologies, procedures, and process” aimed at increasing “the integration of privacy-enhancing technologies into the collection, sharing and analysis of data carried out by the public and private sectors”. HR 847 will now head to the US Senate Committee on Commerce, Science and Transportation. For more information, click here.

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