Bill Aims to Protect Consumers and Businesses During Disasters

As COVID-19 continues to wreak havoc, there has been an irrefutable surge in the U.S. workforce unemployment claims. Claims have spiked to approximately 36 million within the past two months. Despite mitigation strategies, up to a third of all U.S. jobs remain vulnerable, and economists are predicting how the country will survive with no signs of the virus stopping any time soon.

In response to the ongoing coronavirus pandemic, Senator Sherrod Brown (D-OH) introduced the bill Small Business and Consumer Debt Collection Emergency Relief Act of 2020, which proposes to amend the Fair Debt Collection Practices Act (FDCPA).

If the proposed changes were adopted, the FDCPA would prohibit debt collectors, during a disaster period:

  • Capitalizing on unpaid interest.
  • Increasing the rate of interest on debt following the non-payment of prior debt.
  • Filing a suit or threatening to sue due to the non-payment of debt.
  • Continuing litigation on a debt that commenced before the enactment of the law.
  • Enforcing a security interest through repossession or foreclosure.
  • Commencing or continuing an action to collect a debt through wage garnishment.
  • Commencing or continuing to evict the consumer or small-business owner from personal property.
  • Disconnecting any utility services such as electricity, gas, telecommunication, water, or sewer.

In addition to expanding definitions of terms such as “creditor,” “debt,” and “debt collector,” the bill would require debt collectors to shift payment schedules until the conclusion of the disaster period.

Although concerns have been raised regarding the broadness of the bill, it would likely undergo several rounds of changes before being adopted as final. Nonetheless, if the main points of the bill were to become law, it would constitute a significant change that helps protect small businesses and consumers.

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