Four Things to Know About COVID-19 & the Consumer Credit Industry
The news cycle continues to turn and with it comes more information about the coronavirus. Consumer finance companies, like ordinary Americans, are drinking from the firehose, trying to sift through what they need to know now to continue serving customers and helping employees. We’ve tried to distill the information flow down to the top four things you need to know.
Seeking SBA Clarity
The Small Business Administration’s (SBA) Paycheck Protection Program (PPP) has helped countless businesses nationwide stay open and pay their employees. While the language is the CARES Act setting up the PPP is clear – any legitimate business with 500 or fewer employees is eligible – the SBA’s rules have been less clear and unfortunately do not explicitly permit many traditional installment lenders to take advantage of the program. The SBA should conform its rules to the language in the statute. Also, it’s been reported that the money for the program has been depleted. Congress should reauthorize funds as soon as possible so that more business can help their employees.
State Laws Vary
The United States is made up of 50 distinct states and the District of Columbia, all with distinct laws. This diversity is a strength and in times of crisis like this something of a detriment. The American Financial Services Association has been working tirelessly with states to ensure that access to credit is maintained. AFSA has compiled a number of tracking charts to help members navigate this uncertain environment. You can find them here.
Safety & Security
The federal government has classified AFSA members as essential. This is positive for consumers, who can access the credit they need via loans and access to vehicle financing. It does, however, create a challenging working environment for members, who must ensure the safety of their employees. AFSA members have and should take all reasonable precautions to do so, including remote work, social distancing requirements and flex schedules. AFSA webinars and podcasts, as well as the blog, continue to provide best practices for AFSA members.
Consumer Credit is Crucial
Nationwide and in Washington, the vast majority of regulators, policymakers and consumers recognize and understand the important role consumer credit plays during this crisis. AFSA has worked closely with members of the Administration and Congress to ensure credit continues to flow. State regulators have sought out AFSA and its members for information and assistance as they attempt to help their constituents. AFSA is the only trade association, to the best of our knowledge, to work directly with the state of New York, as officials there try to balance consumer protection with credit access.
The overwhelming majority of officials have thanked AFSA members for their work and assistance helping consumers and expressed their belief that the role of consumer credit in the lives of their citizens is critical.
April 20th, 2020
