Financial services

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

Like most industries today, consumer credit services businesses continue to be significantly impacted by COVID-19. To help keep you up to date with relevant activity, 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 April 29, the Consumer Financial Protection Bureau (CFPB) released Spanish translations for certain templates and sample forms included in the Regulation E prepaid rule and for some template adverse action and sample notices included in Regulation B. For more information, click on here.
  • On April 28, Representatives Glenn Thompson (R-PA), Ro Khanna (D-CA), Tom Emmer (R-MN) and Darren Soto (D-FL) introduced the Digital Commodity Exchange Act of 2022, which would create a definition of “digital commodity” and allow the Commodity Futures Trading Commission to oversee companies that issue or allow people to trade these types of tokens, while letting the Securities and Exchange Commission continue to oversee tokens that fall under U.S. securities. For more information, click here.
  • On April 28, the Department of Education announced it would provide relief to tens of thousands of borrowers harmed by pervasive and widespread misconduct at Marinello beauty schools. The 28,000 borrowers who enrolled in the schools from 2009 until its closure in February 2016 will receive loan discharges based on the findings of the borrower defense, totaling about $238 million. This group release also includes borrowers who enrolled in Marinello during this time but have not yet requested a Borrower Defense Release. For more information, click here.
  • On April 27, Acting Comptroller of the Currency Michael J. Hsu issued a statement calling for unified standards for stablecoins after his appearance at the Artificial intelligence and the economy: paving the way for a symposium on responsible and inclusive AI hosted by the U.S. Department of Commerce, National Institute of Standards and Technology (NIST), FinRegLab, and Stanford Institute for Human-Centered Artificial Intelligence. Hsu said creating a set of technical and legal standards for dollar-pegged cryptocurrencies is as “vital to keeping the dollar competitive in the blockchain-based digital economy” as setting the standards for the World Wide Web was for the development of the modern. internet economy. For more information, click here.
  • On April 25, the CFPB announced that it would begin to invoke a previously little-used Dodd-Frank provision to conduct supervisory checks on more non-bank financial companies that may “pose risks to consumers”, especially fintechs. For more information, click here.

State activities:

  • On April 28, Judge Vyskocil of the Southern District of New York granted a preliminary injunction, preventing sheriffs from retroactively enforcing New York’s Fair Consumer Judgment Interest Act. The law, which came into force on April 30, lowers the legal interest rate accrued on the monetary judgment for consumer debt to 2% per annum (instead of 9%). The amendment applies retroactively to unenforced judgments when the law came into force. The court prohibited the sheriff’s office “from refusing to enforce an existing judgment calculated with the rate of interest in effect at the time the judgment was obtained, and from applying the reduction to the existing interest rate of judgments rendered before the effective date of the amendment.” For more information, click here.
  • On April 28, the New York Department of Financial Services released guidelines on the use of blockchain analytics, highlighting “the importance of blockchain analytics to effective policies, processes, and procedures. , including, for example, those relating to customer due diligence, transaction monitoring, and sanctions screening. For more information, click here.
  • On April 26, Washington, D.C. Attorney General Karl Racine issued a press release announcing his office’s legal victories in protecting housing for DC residents. The announced wins included guaranteed restitution to residents for tenants in the district and directed residents to resources and tips on how to report issues with landlords. For more information, click here.
  • On April 22, Arkansas Attorney General Leslie Rutledge joined a bipartisan coalition of attorneys general, urging “GoFundMe to better disclose policies and provide greater clarity in terms of service to consumers who use its platform.” . GoFundMe has helped organizers raise more than $5 billion since 2010 and collects fees between 2.2-2.9% plus $0.3 per transaction. However, according to the press release, information “related to blocking, freezing, refunding and redirecting donations is difficult to find and unclear.” For more information, click here.
  • On April 20, Tennessee became the second state to pass legislation recognizing and allowing Decentralized Autonomous Organizations (DAOs) to register as LLCs under the revised Tennessee Limited Liability Company Act. For more information, click here.

Privacy and cybersecurity activities:

  • On April 28, Connecticut’s Data Privacy Act (SB-6) cleared the penultimate legislative hurdle, passing the House by a vote of 144-5. This legislation has already passed the Connecticut State Senate by a vote of 35 to 0 on April 20, and will now go to Governor Ned Lamont for final signature. If signed, Connecticut would be the fifth state in the nation to pass a data privacy law, and the majority of the substantive requirements would go into effect July 1, 2023. The final version of SB-6 shares many similarities with other recently enacted states. privacy laws, but most closely resembles the Colorado Privacy Act (CPA). Notably, this legislation includes the temporary right to healing, which expires on December 31, 2024. For more information, click on here.
  • On April 25, the Federal Trade Commission (FTC) released guidance titled “What the Pandemic Has Taught Companies About Collecting Health Information.” This guidance includes several recommendations for companies to consider regarding verifying/storing employee COVID-19 vaccination card information. This includes, but is not limited to, reviewing objection to data collection, analyzing how long this sensitive health information will be retained, and providing secure technology to store this information in completely safe. The guide also makes specific recommendations for companies that provide vaccine verification “passport” apps used to store information related to vaccination status. For more information, click here.