Troutman Pepper Consumer Financial Services COVID-19 Weekly Bulletin – January #5 | 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 January 31, the Consumer Financial Protection Bureau (CFPB) published its Fall 2021 Unified Program in the Federal Register. For more information, click here.
  • On January 27, the CFPB released its annual list of consumer reporting companies. The list identifies dozens of specialized reporting companies that collect and sell access to people’s data, including financials, employment, check writing histories or rental histories. For more information, click here.
  • On Jan. 27, the Federal Trade Commission (FTC) reported that in 2021, consumers reported losing approximately $770 million to social media-initiated fraud — about a quarter of all reported fraud losses for the year and an 18-fold increase from 2017, according to the latest from the FTC Spotlight on consumer protection data. For more information, click here.
  • On January 26, the CFPB launched an “initiative,” which the regulator said could “save households billions of dollars a year by reducing unwanted operating costs charged by banks and financial firms.” Consumers with a problem with a consumer financial product or service can file a complaint with the CFPB online or by calling (855) 411-CFPB (2372). For more information, click here.
  • On January 26, the Securities and Exchange Commission (SEC) proposed rules to extend ATS regulation to govern alternative trading systems involved in securities trading, which can reach cryptocurrency exchanges and decentralized finance projects. The 654-page proposal would expand the definition of an “exchange” in Rule 3b-16(a) of the Exchange Act to include “communications protocol systems that make any type of security available for trading.” SEC officials have previously said they believe many, if not all, digital assets qualify as securities. Republican SEC Commissioner Hester Peirce in a dissenting statementnoted that “[e]Even if you have nothing to do with government securities or even fixed income securities, or with traditional securities, read this press release”, because “[i]This covers a lot of ground, and you shouldn’t assume it has nothing to do with you, because it probably does. The proposal has not yet been published in the Federal Register, which will launch the 30-day public comment period. For more information, click here.
  • On January 24, the CFPB issued a notice and request for comment regarding its investigation of buy-it-now and pay-later providers. For more information, click here.

State activities:

  • On January 28, the Texas Supreme Court announced that it was accepting comments on its proposed amendments to the Texas Rules of Civil Procedure, Notices of Judgment and Damages, and Service of a Writ of Seizure- judgment, before their entry into force on 1 May. the court may modify the proposed changes in response to public comments, which are expected by March 4 for [email protected]. For more information, click here.
  • On January 26, New York Attorney General Letitia James announced a major victory over WinRed in a consumer protection case. WinRed is a company that “processes online donations for the Republican Party” and “sued New York, Connecticut, Maryland and Minnesota following the states’ investigation into WinRed’s use of donation boxes recurring items pre-ticked in political solicitations”. The US District Court for the State of Minnesota dismissed WinRed’s jurisdictional challenges, allowing New York (and other states) investigations into the company to continue. For more information, click here.
  • On January 25, the Florida Office of Financial Regulation (OFR) issued a advice to investors “to raise awareness of decentralized finance (DeFi), a relatively new blockchain-based group of financial services that is growing in popularity[.]According to OFR Commissioner Russell C. Weigel, III, “DeFi-based businesses offer lending, banking, and investment options that are decentralized and not dependent on traditional financial markets. This evolution of financial services is not necessarily a bad thing and can be a good thing, but before getting involved with any business or product in the DeFi market, take reasonable steps to understand the risks of this technology and what blockchain-based emerging markets. The OFR states that it is “committed to allowing innovation to grow and thrive while protecting Floridians from bad actors.” For more information, click here.
  • On January 25, a Republican Arizona state senator introduced a bill to add a definition of “legal tender” to Arizona law that would include bitcoin. SB 1341, which defines bitcoin as meaning “the decentralized, peer-to-peer digital currency, in which a record of transactions is kept on the bitcoin blockchain and new monetary units are generated by the solution of mathematical problem calculation and which operates independently of a central bank,” reads here.
  • On January 24, New York Attorney General Letitia James announced a $600,000 settlement with EyeMed after a data breach in 2020. According to the press release, the data breach compromised the personal information of approximately 2.1 million consumers nationwide, including 98,632 in New York. In addition to the monetary settlement, EyeMed agreed to “[p]permanently delete consumers’ personal information when there is no reasonable business or legal purpose for retaining it” and “[e]nencrypt sensitive consumer information that it collects, stores, transmits and/or maintains. For more information, click here.

Privacy and cybersecurity activities:

  • On January 25, California Attorney General Rob Bonta warned Californians to beware of fake COVID-19 testing sites and websites. These scammers exploit vulnerable people by posing as legitimate businesses and healthcare clinics offering COVID-19 testing. However, after receiving payment for a COVID-19 test, these fake testing sites often fail to provide results to patients. They may also request a patient’s personally identifiable information with the intent to commit fraud. Bonta has provided several tips for avoiding fake COVID-19 testing sites, including: (1) only get tested at verified COVID-19 testing sites or through medical groups, (2) identify and avoid “look-alike” websites that appear identical to well-known trusted sites. organizations, and (3) beware of unsolicited calls regarding testing sites. For the full alert, click here.
  • The FTC has warned that social media platforms like Facebook and Instagram are a “gold mine” for crypto scammers. The latest consumer data report from the FTC found a surge in online fraud schemes, particularly fake cryptocurrency companies. Consumers said they lost about $770 million last year to fraud that started with a social media ad or post, up from $258 million a year earlier and a 18 times increase from 2017. These scams are usually either investment schemes, which involve consumers getting tricked into sending money on promises of huge returns but ending up with nothing, or purchase, where individuals purchase an item but never receive it. To read both alerts, click here and here.
  • On January 26, consumer privacy advocates sent a letter urging lawmakers to pass a bill that would prevent law enforcement and intelligence agencies from buying Americans’ private data from telecom providers. . The American Civil Liberties Union (ACLU) led the letter, which encouraged lawmakers to prioritize the “issue of abuse of government surveillance.” To read the letter, click here.
  • In honour of Data Privacy Day on January 28, the New York Department of Financial Services (NYDFS) released several tips to protect the data of its consumers. These include (1) being wary of unsolicited emails and phone calls seeking personal information; (2) secure your mobile devices, including downloading software updates, (3) use Wi-Fi hotspots carefully, including limiting use of public Wi-Fi and carefully connecting to sensitive accounts; (4) use strong passwords; (5) vary the types of security questions used on different accounts; and (6) watch out for phishing. For the full list of advice and statement, click here.
  • Nebraska State Sen. Mike Flood (R-NE) proposed Legislature Bill 1188, which would enact the Uniform Law Commission’s Uniform Personal Data Protection Act (UPDPA). Nebraska is the first state to introduce the ULC framework, written with the goal of universal adoption in all states. The UPDPA calls for certain rights, including a right for users to access and correct data, opt-in requirements for people under 13, and a ban on discrimination. Unlike other bills, it would not give an individual a right of action or a right to suppression. To read the invoice, click on here.

Stephen V. Lee