2019 Review/2020 Preview from the State Capitols
On January 6, AFSA’s State Government Affairs department published its 2020 State Legislative Preview and 2019 Review white paper. Published monthly, AFSA’s state white papers typically provide a snapshot in time covering a single-issue area; however, the 2020 preview/2019 review provides a broad look at activity affecting AFSA members’ priority issues in the legislative session coming to an end, with a sample of what members can expect from the states over the next year. For a full review of the 2019 session, members can check out the white paper in the State Resources section of AFSA’s website.
The states had an active year in 2019, as all 50 state legislatures met in regular session and considered legislation on myriad topics, including debt collection, fintech regulation, mortgage lending and servicing, payment cards and systems, rate caps, traditional installment loans, and vehicle finance. While only a handful of states held off-year elections in 2019, the elections shifted party control of two attorney general offices, one gubernatorial seat, and several state legislative seats.
In the wake of recent major data breaches, privacy and fraud issues continued to be a high priority for many states. Following the example set by California with the CCPA, a number of states considered their own CCPA-inspired bills. Though several of these bills were enacted, none are nearly as far-reaching as the CCPA itself. In addition to the the state legislative activity, state attorneys general had an active year and, in some cases, partnered with each other or federal regulators for enforcement. Vehicle finance, data breach, and collections issues were clear priorities for state AGs in 2019.
The 2020 legislative session is shaping up to focus on innovative products and the privacy implications of existing products, while evergreen issues like rate caps and debt collection will continue draw interest from legislators and consumer activists, and states will look to strengthen their cybersecurity and data breach laws. Depending on the final outcome of industry lawsuits pending in several state, it’s clear that states must more carefully consider the implications and possible federal preemption of new legislation.
The past session saw an increase in states introducing legislation creating regulatory “sandbox” frameworks for fintech or innovative companies, and Utah and Nevada joined Arizona in enacting such programs. This trend is likely to continue in 2020 as more states consider programs of their own. Regulation of the debt settlement industry is one emerging issue in 2020, as debt settlement companies continue to insert themselves between creditors and borrowers without accompanying consumer benefit. Some debt settlement companies may even try to extend loans of their own in schemes to “assist” consumers with settling their debts, as seen in the Colorado attorney general enforcement action in August 2019.
Members can be sure that AFSA is committed to proactively monitoring all issues that could affect the financial services industry and will keep members apprised of new developments as they occur.
January 10th, 2020 by Dan Bucherer