To provide for a temporary debt collection moratorium during the COVID-19 emergency period, and for other purposes.

I 116TH CONGRESS 2D SESSION H. R. 6423 To provide for a temporary debt collection moratorium during the COVID- 19 emergency period, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 31, 2020 Mr. LAWSON of Florida introduced the following bill; which was referred to the Committee on Financial Services A BILL To provide for a temporary debt collection moratorium dur- ing the COVID-19 emergency period, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. DEBT COLLECTION. 3 (a) TEMPORARY DEBT COLLECTION MORATORIUM 4 DURING THE COVID-19 EMERGENCY PERIOD.— 5 (1) IN GENERAL.—The Fair Debt Collection 6 Practices Act (15 U.S.C. 1692 et seq.) is amended 7 by inserting after section 812 the following: 8 VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6423 IH ‘‘§ 812A. Temporary debt collection moratorium dur- 1 ing the COVID-19 emergency period 2 ‘‘(a) DEFINITIONS.—In this section: 3 ‘‘(1) CONSUMER.—The term ‘consumer’ means 4 any natural person obligated or allegedly obligated 5 to pay any debt. 6 ‘‘(2) COVID-19 EMERGENCY PERIOD.—The 7 term ‘COVID-19 emergency period’ means the pe- 8 riod that begins upon the date of the enactment of 9 this Act and ends upon the date of the termination 10 by the Federal Emergency Management Administra- 11 tion of the emergency declared on March 13, 2020, 12 by the President under the Robert T. Stafford Dis- 13 aster Relief and Emergency Assistance Act (42 14 U.S.C. 4121 et seq.) relating to the Coronavirus 15 Disease 2019 (COVID-19) pandemic. 16 ‘‘(3) CREDITOR.—The term ‘creditor’ means 17 any person who offers or extends credit creating a 18 debt or to whom a debt is owed or other obligation 19 of payment. 20 ‘‘(4) DEBT.—The term ‘debt’— 21 ‘‘(A) means any past due obligation or al- 22 leged obligation of a consumer, non-profit orga- 23 nization, or small business to pay money— 24 ‘‘(i) arising out of a transaction in 25 which the money, property, insurance, or 26 VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6423 IH services which are the subject of the trans- 1 action are primarily for personal, family, 2 business, non-profit, or household pur- 3 poses, whether or not such obligation has 4 been reduced to judgment; and 5 ‘‘(ii) owed to a local, State, or Federal 6 government; and 7 ‘‘(B) does not include federally related 8 mortgages (as defined under section 3 of the 9 Real Estate Settlement Procedures Act of 10 1974) unless a deficiency judgment has been 11 made with respect to such federally related 12 mortgage. 13 ‘‘(5) DEBT COLLECTOR.—The term ‘debt col- 14 lector’ includes a creditor and any person or entity 15 that engages in the collection of debt (including the 16 Federal Government or a State government) whether 17 or not the debt is allegedly owed to or assigned to 18 that person or entity. 19 ‘‘(6) DEPOSITORY INSTITUTION.—The term ‘de- 20 pository institution’— 21 ‘‘(A) has the meaning given that term 22 under section 3 of the Federal Deposit Insur- 23 ance Act; and 24 VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6423 IH ‘‘(B) means a Federal or State credit 1 union (as such terms are defined, respectively, 2 under section 101 of the Federal Credit Union 3 Act). 4 ‘‘(7) NON-PROFIT ORGANIZATION.—The term 5 ‘non-profit organization’ means an organization de- 6 scribed in section 501(c)(3) of the Internal Revenue 7 Code of 1986 and exempt from taxation under sub- 8 section (a) of such section. 9 ‘‘(8) SMALL BUSINESS.—The term ‘small busi- 10 ness’ has the meaning given the term ‘small business 11 concern’ under section 3 of the Small Business Act 12 (15 U.S.C. 632). 13 ‘‘(b) PROHIBITIONS.—Notwithstanding any other 14 provision of law, during COVID-19 emergency period and 15 the 120-day period immediately following, a debt collector 16 is prohibited from— 17 ‘‘(1) capitalizing or adding extra interest or fees 18 triggered by the non-payment of an obligation by a 19 consumer, small business, or non-profit organization 20 to the balance of an account; 21 ‘‘(2) suing or threatening to sue a consumer, 22 small business, or non-profit for a past-due debt; 23 ‘‘(3) continuing litigation initiated before the 24 date of enactment of this section to collect a debt 25 VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6423 IH from a consumer, small business, or non-profit orga- 1 nization; 2 ‘‘(4) enforcing a security interest, including 3 through repossession or foreclosure, against a con- 4 sumer, small business, or non-profit organization; 5 ‘‘(5) reporting a past due debt of a consumer, 6 small business, or non-profit organization to a con- 7 sumer reporting agency; 8 ‘‘(6) taking or threatening to take any action to 9 enforce collection, or any adverse action against a 10 consumer, small business, or non-profit organization 11 for non-payment or for non-appearance at any hear- 12 ings related to a debt; 13 ‘‘(7) except with respect to enforcing an order 14 for child support or spousal support, initiating or 15 continuing any action to cause or to seek to cause 16 the collection of a debt from wages, Federal benefits, 17 or other amounts due to a consumer, small business, 18 or non-profit organization, by way of garnishment, 19 deduction, offset, or other seizure, or to cause or 20 seek to cause the collection of a debt by seizing 21 funds from a bank account or any other assets held 22 by such consumer, small business, or non-profit or- 23 ganization; 24 VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6423 IH ‘‘(8) in the case of action or collection described 1 under paragraph (7) that was initiated prior to the 2 beginning of the date of such disaster or emergency, 3 failing to suspend the action or collection until 120 4 days after the end of the COVID-19 emergency pe- 5 riod; 6 ‘‘(9) upon the termination of the incident period 7 for such disaster or emergency, failing to extend the 8 time period to pay an obligation by one payment pe- 9 riod for each payment that a consumer, small busi- 10 ness, or non-profit organization missed during the 11 incident period, with the payments due in the same 12 amounts and at the same intervals as the pre-exist- 13 ing payment schedule of the consumer, small busi- 14 ness, or non-profit organization (as applicable) or, if 15 the debt has no payment periods, allow the con- 16 sumer, small business, or non-profit a reasonable 17 time in which to repay the debt in affordable pay- 18 ments; 19 ‘‘(10) disconnecting a consumer, small business, 20 or non-profit organization from a utility prepaid or 21 post-paid electricity, natural gas, telecommuni- 22 cations, broadband, water, or sewer service; or 23 ‘‘(11) exercising a right to set off provision con- 24 tained in any consumer, small business, or non-prof- 25 VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6423 IH it organization account agreement with a depository 1 institution. 2 ‘‘(c) VIOLATION.—Any person who violates a provi- 3 sion of this section shall— 4 ‘‘(1) be treated as a debt collector for purposes 5 of section 813; and 6 ‘‘(2) be liable to the consumer, small business, 7 or non-profit organization an amount equal to 10 8 times the damages allowed under section 813 for 9 each such violation.’’. 10 (2) TABLE OF CONTENTS AMENDMENT.—The 11 table of contents at the beginning of the Fair Debt 12 Collection Practices Act (15 U.S.C. 1692 et seq.) is 13 amended by inserting after the item relating to sec- 14 tion 812 the following new item: 15 ‘‘812A. Temporary debt collection moratorium during the COVID-19 emergency period.’’. (b) CONFESSIONS OF JUDGMENT PROHIBITION.— 16 (1) IN GENERAL.—Chapter 2 of the Truth in 17 Lending Act (15 U.S.C. 1631 et seq.) is amended— 18 (A) by adding at the end the following: 19 ‘‘§ 140B. Confessions of judgment prohibition 20 ‘‘(a) IN GENERAL.—During a period described under 21 section 812A(b) of the Fair Debt Collection Practices Act, 22 no person may directly or indirectly take or receive from 23 another person or seek to enforce an obligation that con- 24 VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6423 IH stitutes or contains a cognovit or confession of judgment 1 (for purposes other than executory process in the State 2 of Louisiana), warrant of attorney, or other waiver of the 3 right to notice and the opportunity to be heard in the 4 event of suit or process thereon. 5 ‘‘(b) EXEMPTION.—The exemption in section 104(1) 6 shall not apply to this section. 7 ‘‘(c) DEBT DEFINED.—In this section, the term 8 ‘debt’ means any obligation of a person to pay to another 9 person money— 10 ‘‘(1) regardless of whether the obligation is ab- 11 solute or contingent, if the understanding between 12 the parties is that any part of the money shall be 13 or may be returned; 14 ‘‘(2) that includes the right of the person pro- 15 viding the money to an equitable remedy for breach 16 of performance if the breach gives rise to a right to 17 payment; and 18 ‘‘(3) regardless of whether the obligation or 19 right to an equitable remedy described in paragraph 20 (2) has been reduced to judgment or is fixed, contin- 21 gent, matured, unmatured, disputed, undisputed, se- 22 cured, or unsecured.’’; and 23 (B) in the table of contents for such chap- 24 ter, by adding at the end the following: 25 ‘‘140B. Confessions of judgment prohibition.’’. VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6211 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6423 IH (2) CONFORMING AMENDMENT.—Section 1 130(a) of the Truth in Lending Act (15 U.S.C. 2 1640(a)) is amended by adding at the end the fol- 3 lowing: ‘‘For purposes of this section, the term 4 ‘creditor’ refers to any person charged with compli- 5 ance.’’. 6 Æ VerDate Sep 11 2014 18:29 Apr 10, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H6423.IH H6423 pamtmann on DSKBC07HB2PROD with BILLS