ACA studies 1,800-page recovery bill introduced by House Democrats
5/13/2020 9:00
As members are likely aware, House Democrats on Tuesday introduced an economic recovery bill that includes a number of provisions troubling to the accounts receivable management industry. However, notably it does not include an outright ban on collections or impact the ability to make phone calls. The $3 trillion “Health and Economic Recovery Omnibus Emergency Solutions (HEROES) ACT” would restrict collections of consumer debt during a “national disaster or emergency,” after the expiration of a covered period, a debt collector would not be permitted to add any “past due debt any interest on unpaid interest, higher rate of interest triggered by the nonpayment of the debt, or fee triggered prior to the expiration of the covered period by the nonpayment of the debt.” It specifically bans collecting any debt, by way of garnishment, attachment, assignment, deduction, offset, or other seizure, from wages, income, benefits, bank, prepaid or other asset accounts; or (ii) any assets of, or other amounts due to, a small business or nonprofit organization.
The legislation also includes vague language surrounding negative credit reporting during natural disasters, noting that restrictions on medical debt reporting are not restricted to the covered period. Additionally, it increases penalties by 10 times and requires defined payment plans.
Other areas of note include student loan debt language stating:
“Effective from enactment to September 2021, Treasury will pay the amount due on loans up to an aggregate maximum of $10,000. Any interest on a private education loan cannot be capitalized. On consumer reporting, no adverse credit information may be furnished on any private education loan. All involuntary collection on a private education loan must immediately be halted.
- For borrowers in default, no payment made or forbearance shall be considered an event impacting applicable state statutes of limitation.
- A private education loan debt collector or creditor may not pressure a borrower to elect to apply any amount received to any private education loan.
Other sections are related to repayment and forbearance for consumers;
To review a working summary of the bill click here.