House Committee Proposes Debt Collection Prevention

Congresswoman Maxine Waters, Chairwoman of the House Committee on Financial Services, led Committee Democrats in releasing the Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act, legislation to provide a comprehensive stimulus and public policy response to the coronavirus pandemic. Included in the bill are provisions to prevent debt collection, led by Congressman Al Lawson.

“In light of the global coronavirus pandemic, and the economic hardship it will bring, my bill would suspend debt collections activity for 120 days to allow families and businesses an opportunity to get back on their feet," said Lawson. "This would give working Americans, small business and non-profits another tool in the recovery process.”

Also included in the bill is Chairwoman Waters’ bill to provide monthly direct payments of up to $2,000 per eligible adult (who makes less than $115,000, or $230,000 for joint filers) and $1,000 per child for as long as the crisis and potential recession may last, and mandating funds be made available to consumers as quickly as possible. The bill will also give the unbanked access to their funds through a new digital wallet they can open at a financial institution.

Additionally, Rep. Jesus “Chuy” Garcia included a bill to ban all evictions and foreclosures during the pandemic.

“The House Financial Services Committee has been working around the clock to provide a bold fiscal stimulus and public policy response to the COVID-19 crisis,” said Chairwoman Waters. “Last week, we outlined a comprehensive plan to address the needs of hardworking and vulnerable Americans who may face financial hardship as a result of this devastating pandemic. Today, I am proud to lead my colleagues in releasing a package of more than 40 bills to implement this plan, including my legislation to provide up to $2,000 a month for most adults and $1,000 for each of their children during the pandemic"

These lawmakers have also turned their eye to servicers. Bloomberg reports that several Democrats with the U.S. House and Senate are requesting Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell to provide funds to mortgage servicers.

“The Fed and Treasury should use powers given to them under recent stimulus measures to provide liquidity to servicers facing shortfalls,” Chairwoman Waters and Sherrod Brown, the top Democrat on the Senate Banking Committee, said in a letter Wednesday.

Steps that government-sponsored Ginnie Mae has taken may not be enough, the lawmakers wrote.

“Mortgage servicers are expected to face increased strain as millions of homeowners and renters lose jobs, are furloughed, or see reduced hours, all of which will keep them from making mortgage and rent payments, as a result of this public health crisis,” the letter states. “We must not allow the pandemic to destabilize critical markets, including our housing market.”