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House Financial Services Committee Preparing Foreclosure Halt

House Democrats are preparing another COVID-19 relief package, according to Law360. A memo reveals that Financial Services Committee staff are recommending a blanket ban on stock buybacks, a halt to all evictions and foreclosures, and a pause on any negative credit reporting.

The memo from committee staffers to Democratic committee members represents the early stages of discussions for another relief bill following the over $2 trillion measure that became law March 27. It suggests changes that would impact banking, housing, corporate regulation, credit reporting, and other areas, Law360 reports.

In corporate regulation, the memo recommends a blanket ban on stock buybacks, regardless of whether companies accept federal relief funds, "until the impacts of the coronavirus on the American financial system have ended to ensure that companies are using their excess cash to pay workers, shore up their bottom lines and invest in their communities."

Another item would halt debt collection during COVID-19 and protect stimulus payments from garnishment. While the latest relief bill paused payments and interest accrual on federal student loans, Democratic staff suggested extending that policy to private education loans and using $60 billion to forgive $10,000 of student debt to about 6 million private borrowers.

The housing suggestions include $100 billion for low-income renters, $35 billion for low-income homeowners and $100 billion for affordable housing, using construction as economic stimulus. Other ideas include a universal moratorium on evictions for failure to pay rent, regardless of whether the landlord uses federally backed loans. The funds for low-income renters would then go to landlords.

Along with the industry requirements, the memo also suggests giving $2,000 direct payments to most adults each month until the unemployment rate recovers to within two percentage points of its pre-crisis level. This proposal would likely cost trillions of dollars, but lawmakers on both sides of the aisle have shown interest in some direct payments, with two rounds of $1,200 per adult included in the latest bill.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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