Consumer Financial Services Committee Newsletter — July 2020

Consumers

Leadership Message

Anna-Katrina Christakis

“[Law] becomes greater and nobler in calamity.” – Gabriel Garcia Marquez | Of course Marquez was speaking of love, but his words are just as powerful when applied to the legal profession. The last six months have brought many changes in the world, including the consumer financial services industry. Federal, state, and local governments have passed measures to reduce the stress of increasing morbidity, restricted mobility, and high unemployment. There is tremendous uncertainty, but also many opportunities to step up our game and engage as a community in new and different ways.

Consumers

An Editorial Note: The Consumer Financial Services Regulatory Space Responds to COVID-19

The first half of the year 2020 has been one of challenges as a global pandemic changed the way we live and work. The new challenges for law firms and financial services providers are too numerous to mention. The personal cost for some people is incalculable, as friends and loved ones of our members have struggled with COVID-19 infections. So many individuals worldwide have lost that struggle.

Consumers

Will COVID-19 Fraud Issues Impact the Use of Real-Time Payments?

Judy Mok and Amy Schwartz

Payments fraud is big business, even in the best of times. According to the ABA’s 2019 Deposit Account Fraud Survey Report, there were $25.1 billion in fraud attempts in 2018, up more than 30% from just two years earlier. These fraud attempts took place on all account mediums—checks, debit cards, and electronic banking transactions. Although banks were effective in preventing nearly 90% of the fraud, fraudsters nonetheless made off with $2.8 billion in stolen money.

Consumers

Credit Reporting During a Pandemic

Aaron Kouhoupt

The economic impact of COVID-19 has already proven catastrophic for many businesses and consumers. Many employers are reducing their staffing or closing their doors permanently. As of June 5, 2020, the unemployment rate was at 13.3% , while 20.5 million jobs were lost in April alone. In response, many lenders and loan servicers are tirelessly working to assist customers through the economic uncertainty, by offering them a range of hardship accommodations. At the same time, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide specific relief to those impacted by the widespread global shutdown.

Consumers

State Regulation of Student Loan Servicing Continues to Evolve

Jeremy Sairsingh

With the CARES Act effectively pausing loan payments for the tens of millions of borrowers with student loans owned by the Department of Education, and members of Congress increasingly proposing various forms of loan forgiveness as a possible response to the Covid-19 crisis, the federal government’s involvement in student lending has been front and center over the past couple of months. It is thus easy to forget that states are increasingly playing a central role in student lending, particularly when it comes to the regulation of student loan servicing.