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U.S. House Continues Consideration of Debt Collection Moratorium


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Proposal would prohibit some debt collection activities.

5/6/2020 9:00

In March, Democrats on the House Financial Services Committee led by Chairwoman Maxine Waters, D-Calif., released the Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321 legislation to provide a comprehensive stimulus and public policy response to the coronavirus pandemic. Yesterday, Chairwoman Waters sent out a press release indicating that this legislation remains a priority for the House Financial Services Committee Democrats.

H.R. 6321 includes a bill from U.S. Rep. Al Lawson, D-Fla., that would prohibit, among other things, during COVID-19 emergency period and the 120-day period immediately following:

  • Capitalizing or adding extra interest or fees triggered by the non-payment of an obligation by a consumer, small business, or non-profit organization to the balance of an account;
  • Suing or threatening to sue a consumer, small business, or non-profit for a past-due debt;
  • Continuing litigation initiated before the date of enactment of this section to collect a debt from a consumer, small business, or non-profit organization;
  • Enforcing a security interest, including through repossession or foreclosure, against a consumer, small business, or non-profit organization;
  • Reporting a past-due debt of a consumer, small business, or non-profit organization to a consumer reporting agency;
  • Taking or threatening to take any action to enforce collection, or any adverse action against a consumer, small business, or non-profit organization for non-payment or for non-appearance at any hearings related to a debt;
  • Except with respect to enforcing an order for child support or spousal support, initiating or continuing any action to cause or to seek to cause the collection of a debt from wages, Federal benefits, or other amounts due to a consumer, small business, or non-profit organization, by way of garnishment, deduction, offset, or other seizure, or to cause or seek to cause the collection of a debt by seizing funds from a bank account or any other assets held by such consumer, small business, or non-profit organization;
  • In the case of action or collection described under paragraph (7) that was initiated prior to the beginning of the date of such disaster or emergency, failing to suspend the action or collection until 120 days after the end of the COVID-19 emergency period;
  • Upon the termination of the incident period for such disaster or emergency, failing to extend the time period to pay an obligation by one payment period for each payment that a consumer, small business, or non-profit organization missed during the incident period, with the payments due in the same amounts and at the same intervals as the pre-existing payment schedule of the consumer, small business, or non-profit organization (as applicable) or, if the debt has no payment periods, allow the consumer, small business, or non-profit a reasonable time in which to repay the debt in affordable payments.

The bill also states that a person who violates these provisions would be liable for 10 times the damages allowed under section 813 of the FDCPA.

H.R. 6321 in Section 104 also includes a section concerning suspension of other consumer loans that limits communication in connection with the collection of a debt. This section states, "during the COVID–19 emergency, without prior consent of a consumer given directly to a debt collector during the COVID–19 emergency, or the express permission of a court of competent jurisdiction, a debt collector may only communicate in writing in connection with the collection of any debt (other than debt related to a federally related mortgage loan)."

The U.S. House of Representatives is expected to return to Washington in the next couple of weeks.

ACA’s advocacy team hasn’t slowed its efforts in advocating to ensure that the industry’s role in providing consumer benefits is considered in these proposals. It is important to have policies that provide consumers with more options that will allow them to continue to access credit and services. This is critical due to the uncertainty about the length and severity of the economic impact related to the coronavirus.

The Senate is in session this week and starting to consider additional legislation.

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