The proposal, while updated, would still have a significant impact on the accounts receivable management industry, small businesses and the ability to work with consumers. ACA International is continuing to advocate with Congress on the bill. Editor’s note: This article is available for members only.
10/1/2020 10:00
On Monday, Democrats in the U.S. House of Representatives proposed a $2.2 trillion relief package that is an updated version of the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) ACT.
The updated HEROES Act includes components of the original bill that would have a significant impact on the accounts receivable management (ARM) industry related to credit reporting and some restrictions on debt collection during a national emergency, when collectors can actually help consumers more through hardship programs.
ACA International appreciates that Congress still did not include language limiting the ability to make phone calls. Changes that would have a significant impact on the ARM industry are outlined for members in a summary from our advocacy team.
The updated proposal includes:
- Suspending Negative Credit Reporting and Strengthening Consumer Protections
This section would suspend negative consumer credit reporting during the COVID-19 pandemic and other declared major disasters, plus 120 days. Credit score furnishers would be prohibited from implementing new credit scoring models that would lower existing consumer credit scores during the COVID-19 pandemic or during other major disaster periods. This section also permanently bans the reporting of medical debt arising out of COVID-19 treatments.
- Restrictions on Collections of Consumer Debt During a National Disaster or Emergency
This legislation provides a temporary moratorium on consumer debt collection during this COVID-19 crisis, and for 120 days thereafter, except for mortgage loans covered by Sections 4022 and 4023 of the CARES Act.
- Repayment Period and Forbearance for Consumers
This section ensures reasonable forbearance and repayment options for consumers when payments resume following the current moratorium, including simply maintaining the same payment schedule by extending the maturity by the same period of time that payments were suspended.
The proposed bill also includes an extension of unemployment insurance benefits, more $1,200 stimulus payments and improvements to the Paycheck Protection Program to serve the smallest businesses and struggling nonprofits, providing hard-hit businesses with second loans, according to a news release from the House Committee on Appropriations. It would also protect businesses’ payrolls through enhancing the employee retention tax credit.
ACA is continuing to advocate with Congress on the proposal. The U.S. Senate is not expected to take up the full package from the House and there will continue to be opportunities for Congress to remove the problematic sections.
ACA is not expecting an agreement on the bill before the Nov. 3 election, but is preparing for it to resurface during the lame duck session and before the end of the year.
Related Content from ACA International:
Member Alert: ACA Outlines Concerns in the HEROES Act
ACA International Outlines Problems with House HEROES Act
ACA Advocacy: Comparing Senate and House Economic Relief Proposals