WASHINGTON, D.C. –
Hudson Cook partner Lucy Morris cautioned the financial-services industry not to set aside completely a task that might have been a top priority before the coronavirus pandemic arrived.
“As the public health crisis spreads and worsens, one might think that law enforcement agencies like the Consumer Financial Protection Bureau and Federal Trade Commission would pause enforcement and supervision work so that companies can focus on the health and safety of customers and employees,” Morris wrote in a commentary posted on Hudson Cook’s website.
Morris then added, “the CFPB and other agencies are still very much open for business.”
In separate announcements, the regulators that closely govern auto financing and other segments of financial services gave pledges to work with firms that also have a long list of crisis-connected tasks.
Federal Trade Commission chairman Joe Simons first indicated the FTC’s staff is working hard with other enforcement authorities and stakeholders to stop scammers and other unfair and deceptive business practices during the pandemic.
“We will not tolerate businesses seeking to take advantage of consumers’ concerns and fears regarding coronavirus disease, exigent circumstances, or financial distress,” Simons said in a news release.
In addition, Simons noted that the FTC will remain flexible and reasonable in enforcing compliance requirements on companies that may hinder the provision of important goods and services to consumers, and will consider good faith efforts to provide needed goods and services in making enforcement decisions.
“The FTC is ready to assist businesses that may seek guidance about compliance obligations on consumer protection issues during this unprecedented time,” Simons said.
Meanwhile over the CFPB, the bureau announced that it is providing flexibility to enable financial companies to work with customers in need as they respond to the COVID-19 pandemic. The CFPB said it is postponing some data collections from industry on bureau-related rules to allow companies to focus on responding to consumers in need and making changes to its supervisory activities to account for operational challenges at regulated entities.
“As consumers seek temporary relief from lenders, the pandemic is impacting the operations of financial companies that are eager to help their customers during this unprecedented time,” CFPB director Kathleen Kraninger said in a news release.
“Our actions today are temporary and targeted to support consumers by allowing financial companies to focus their resources on assisting consumers,” Kraninger continued.
“The bureau, along with our state and federal partners, have released prior guidance encouraging financial institutions to work constructively with borrowers and other customers affected by COVID-19 to meet their financial needs. We will continue to issue additional guidance and policies to facilitate the ongoing collaborative relationship between companies and their customers during this time,” Kraninger went on to say, in a reference to this previous recommendation from federal officials.
The CFPB also announced that as a result of operational challenges confronted by institutions due to the pandemic, the bureau said it will work with affected financial institutions in scheduling examinations and other supervisory activities to minimize disruption and burden.
When conducting examinations and other supervisory activities and in determining whether to take enforcement action, the bureau indicated that it will consider the circumstances that entities may face as a result of the COVID-19 pandemic and will be sensitive to good-faith efforts demonstrably designed to assist consumers.
The latest statements from the CFPB about quarterly reporting as well as other investigative and enforcement actions can be found here.