Relief for Small Businesses and Nonprofits Act

I 116TH CONGRESS 2D SESSION H. R. 6361 To provide loan and obligation payment relief for small businesses and nonprofits affected by the COVID–19 emergency, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 23, 2020 Mr. PERLMUTTER introduced the following bill; which was referred to the Committee on Financial Services A BILL To provide loan and obligation payment relief for small busi- nesses and nonprofits affected by the COVID–19 emer- gency, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Relief for Small Busi- 4 nesses and Nonprofits Act’’. 5 SEC. 2. LOAN AND OBLIGATION PAYMENT RELIEF FOR AF- 6 FECTED SMALL BUSINESSES AND NON- 7 PROFITS. 8 (a) IN GENERAL.— 9 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 6361 IH (1) IN GENERAL.—During the COVID–19 1 emergency, a debt collector may not, with respect to 2 a debt of a small business or nonprofit (other than 3 debt related to a federally related mortgage loan)— 4 (A) capitalize unpaid interest; 5 (B) apply a higher interest rate triggered 6 by the nonpayment of a debt to the debt bal- 7 ance; 8 (C) charge a fee triggered by the non- 9 payment of a debt; 10 (D) sue or threaten to sue for nonpayment 11 of a debt; 12 (E) continue litigation to collect a debt 13 that was initiated before the date of enactment 14 of this section; 15 (F) submit or cause to be submitted a con- 16 fession of judgment to any court; 17 (G) enforce a security interest through re- 18 possession, limitation of use, or foreclosure; 19 (H) take or threaten to take any action to 20 enforce collection, or any adverse action for 21 nonpayment of a debt, or for nonappearance at 22 any hearing relating to a debt; 23 (I) commence or continue any action to 24 cause or to seek to cause the collection of a 25 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 6361 IH debt, including pursuant to a court order issued 1 before the end of the 120-day period following 2 the end of the COVID–19 emergency, from 3 wages, Federal benefits, or other amounts due 4 to a small business or nonprofit by way of gar- 5 nishment, deduction, offset, or other seizure; 6 (J) cause or seek to cause the collection of 7 a debt, including pursuant to a court order 8 issued before the end of the 120-day period fol- 9 lowing the end of the COVID–19 emergency, by 10 levying on funds from a bank account or seizing 11 any other assets of a small business or non- 12 profit; 13 (K) commence or continue an action to 14 evict a small business or nonprofit from real or 15 personal property; or 16 (L) disconnect or terminate service from 17 utility service, including electricity, natural gas, 18 telecommunications or broadband, water, or 19 sewer. 20 (2) RULE OF CONSTRUCTION.—Nothing in this 21 subsection may be construed to prohibit a small 22 business or nonprofit from voluntarily paying, in 23 whole or in part, a debt. 24 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 6361 IH (3) REPAYMENT PERIOD.—After the expiration 1 of the COVID–19 emergency, with respect to a debt 2 described under paragraph (1), a debt collector— 3 (A) may not add to the debt balance any 4 interest or fee prohibited by paragraph (1); 5 (B) shall, for credit with a defined term or 6 payment period, extend the time period to repay 7 the debt balance by 1 payment period for each 8 payment that a small business or nonprofit 9 missed during the COVID–19 emergency, with 10 the payments due in the same amounts and at 11 the same intervals as the pre-existing payment 12 schedule; 13 (C) shall, for an open end credit plan (as 14 defined under section 103 of the Truth in 15 Lending Act) or other credit without a defined 16 term, allow the small business or nonprofit to 17 repay the debt balance in a manner that does 18 not exceed the amounts permitted by formulas 19 under section 170(c) of the Truth in Lending 20 Act and regulations promulgated thereunder; 21 and 22 (D) shall, when the small business or non- 23 profit notifies the debt collector, offer reason- 24 able and affordable repayment plans, loan 25 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 6361 IH modifications, refinancing, options with a rea- 1 sonable time in which to repay the debt. 2 (4) COMMUNICATIONS IN CONNECTION WITH 3 THE COLLECTION OF A DEBT.— 4 (A) IN GENERAL.—During the COVID–19 5 emergency, without prior consent of a small 6 business or nonprofit given directly to a debt 7 collector during the COVID–19 emergency, or 8 the express permission of a court of competent 9 jurisdiction, a debt collector may only commu- 10 nicate in writing in connection with the collec- 11 tion of any debt (other than debt related to a 12 federally related mortgage loan). 13 (B) REQUIRED DISCLOSURES.— 14 (i) IN GENERAL.—All written commu- 15 nications described under subparagraph 16 (A) shall inform the small business or non- 17 profit that the communication is for infor- 18 mational purposes and is not an attempt to 19 collect a debt. 20 (ii) REQUIREMENTS.—The disclosure 21 required under clause (i) shall be made— 22 (I) in type or lettering not small- 23 er than 14-point bold type; 24 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 6361 IH (II) separate from any other dis- 1 closure; 2 (III) in a manner designed to en- 3 sure that the recipient sees the disclo- 4 sure clearly; 5 (IV) in English and Spanish and 6 in any additional languages in which 7 the debt collector communicates, in- 8 cluding the language in which the 9 loan was negotiated, to the extent 10 known by the debt collector; and 11 (V) may be provided by first- 12 class mail or electronically, if the bor- 13 rower has otherwise consented to elec- 14 tronic communication with the debt 15 collector and has not revoked such 16 consent. 17 (iii) ORAL NOTIFICATION.—Any oral 18 notification shall be provided in the lan- 19 guage the debt collector otherwise uses to 20 communicate with the borrower. 21 (iv) WRITTEN TRANSLATIONS.—In 22 providing written notifications in languages 23 other than English in this section, a debt 24 collector may rely on written translations 25 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 6361 IH developed by the Bureau of Consumer Fi- 1 nancial Protection. 2 (5) VIOLATIONS.— 3 (A) IN GENERAL.—Any person who vio- 4 lates this section shall be subject to civil liabil- 5 ity in accordance with section 813 of the Fair 6 Debt Collection Practices Act, as if the person 7 is a debt collector for purposes of that section. 8 (B) PREDISPUTE ARBITRATION AGREE- 9 MENTS.—Notwithstanding any other provision 10 of law, no predispute arbitration agreement or 11 predispute joint-action waiver shall be valid or 12 enforceable with respect to a dispute brought 13 under this section, including a dispute as to the 14 applicability of this section, which shall be de- 15 termined under Federal law. 16 (6) TOLLING.—Except as provided in para- 17 graph (7)(D), any applicable time limitations, in- 18 cluding statutes of limitations, related to a debt 19 under Federal or State law shall be tolled during the 20 COVID–19 emergency. 21 (7) CLAIMS OF AFFECTED CREDITORS AND 22 DEBT COLLECTORS.— 23 (A) VALUATION OF PROPERTY.—With re- 24 spect to any action asserting a taking under the 25 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 6361 IH Fifth Amendment of the Constitution of the 1 United States as a result of this section or 2 seeking a declaratory judgment regarding the 3 constitutionality of this section, the value of the 4 property alleged to have been taken without 5 just compensation shall be evaluated— 6 (i) with consideration of the likelihood 7 of full and timely payment of the obliga- 8 tion without the actions taken pursuant to 9 this section; and 10 (ii) without consideration of any as- 11 sistance provided directly or indirectly to 12 the small business or nonprofit from other 13 Federal, State, and local government pro- 14 grams instituted or legislation enacted in 15 response to the COVID–19 emergency. 16 (B) SCOPE OF JUST COMPENSATION.—In 17 an action described in subparagraph (A), any 18 assistance or benefit provided directly or indi- 19 rectly to the person from other Federal, State, 20 and local government programs instituted in or 21 legislation enacted response to the COVID–19 22 emergency, shall be deemed to be compensation 23 for the property taken, even if such assistance 24 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 6361 IH or benefit is not specifically provided as com- 1 pensation for property taken by this section. 2 (C) APPEALS.—Any appeal from an action 3 under this section shall be treated under section 4 158 of title 28, United States Code, as if it 5 were an appeal in a case under title 11, United 6 States Code. 7 (D) REPOSE.—Any action asserting a tak- 8 ing under the Fifth Amendment to the Con- 9 stitution of the United States as a result of this 10 section shall be brought within not later than 11 180 days after the end of the COVID–19 emer- 12 gency. 13 (8) DEFINITIONS.—In this section: 14 (A) COVID–19 EMERGENCY.—The term 15 ‘‘COVID–19 emergency’’ means the period that 16 begins upon the date of the enactment of this 17 Act and ends on the date of the termination by 18 the Federal Emergency Management Agency of 19 the emergency declared on March 13, 2020, by 20 the President under the Robert T. Stafford Dis- 21 aster Relief and Emergency Assistance Act (42 22 U.S.C. 4121 et seq.) relating to the 23 Coronavirus Disease 2019 (COVID–19) pan- 24 demic. 25 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 6361 IH (B) CREDITOR.—The term ‘‘creditor’’ 1 means— 2 (i) any person who offers or extends 3 credit creating a debt or to whom a debt 4 is owed or other obligation for payment; 5 (ii) any lessor of real or personal 6 property; or 7 (iii) any provider of utility services. 8 (C) DEBT.—The term ‘‘debt’’— 9 (i) means any obligation or alleged ob- 10 ligation— 11 (I) for which the original agree- 12 ment, or if there is no agreement, the 13 original obligation to pay was created 14 before or during the COVID–19 emer- 15 gency, whether or not such obligation 16 has been reduced to judgment; and 17 (II) that arises out of a trans- 18 action with a small business or non- 19 profit; and 20 (ii) does not include a federally re- 21 lated mortgage loan. 22 (D) DEBT COLLECTOR.—The term ‘‘debt 23 collector’’ means a creditor, and any person or 24 entity that engages in the collection of debt, in- 25 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 6361 IH cluding the Federal Government and a State 1 government, irrespective of whether the debt is 2 allegedly owed to or assigned to that person or 3 to the entity. 4 (E) FEDERALLY RELATED MORTGAGE 5 LOAN.—The term ‘‘federally related mortgage 6 loan’’ has the meaning given that term under 7 section 3 of the Real Estate Settlement Proce- 8 dures Act of 1974 (12 U.S.C. 2602). 9 (F) NONPROFIT.—The term ‘‘nonprofit’’ 10 means an organization described in section 11 501(c)(3) of the Internal Revenue Code of 1986 12 and exempt from taxation under section 501(a) 13 of such Code. 14 (G) SMALL BUSINESS.—The term ‘‘small 15 business’’ has the meaning given the term 16 ‘‘small business concern’’ under section 3 of the 17 Small Business Act. 18 (b) CREDIT FACILITY FOR OTHER PURPOSES.—The 19 Board of Governors of the Federal Reserve System shall 20 establish a facility that the Board of Governors shall use 21 to make payments to holders of loans or obligations to 22 compensate such holders for documented financial 23 losses— 24 VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 6361 IH (1) with respect to a loan or obligation made to 1 an individual, small business, or nonprofit; and 2 (2) where such losses were caused by a suspen- 3 sion of payments required under Federal law in con- 4 nection with the COVID–19 emergency. 5 Æ VerDate Sep 11 2014 22:40 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6301 E:\BILLS\H6361.IH H6361 pbinns on DSKJLVW7X2PROD with BILLS