Consumer Relief during COVID–19 Act

I 116TH CONGRESS 2D SESSION H. R. 7796 To amend the Fair Debt Collection Practices Act to restrict collections of consumer debt during a national disaster or emergency, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 27, 2020 Mrs. BEATTY (for herself and Ms. WATERS) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Fair Debt Collection Practices Act to restrict collections of consumer debt during a national disaster or emergency, 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 ‘‘Consumer Relief dur- 4 ing COVID–19 Act’’. 5 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7796 IH SEC. 2. RESTRICTIONS ON COLLECTIONS OF CONSUMER 1 DEBT DURING A NATIONAL DISASTER OR 2 EMERGENCY. 3 (a) IN GENERAL.—The Fair Debt Collection Prac- 4 tices Act (15 U.S.C. 1692 et seq.) is amended by inserting 5 after section 812 (15 U.S.C. 1692j) the following: 6 ‘‘§ 812A. Restrictions on collections of consumer debt 7 during a national disaster or emergency 8 ‘‘(a) DEFINITIONS.—In this section: 9 ‘‘(1) COVERED PERIOD.—The term ‘covered pe- 10 riod’ means the period beginning on the date of en- 11 actment of this section and ending 120 days after 12 the end of the incident period for the emergency de- 13 clared on March 13, 2020, by the President under 14 section 501 of the Robert T. Stafford Disaster Relief 15 and Emergency Assistance Act (42 U.S.C. 4121 et 16 seq.) relating to the Coronavirus Disease 2019 17 (COVID–19) pandemic. 18 ‘‘(2) CREDITOR.—The term ‘creditor’ means 19 any person— 20 ‘‘(A) who offers or extends credit creating 21 a debt or to whom a debt is owed; or 22 ‘‘(B) to whom any obligation for payment 23 is owed. 24 ‘‘(3) DEBT.—The term ‘debt’— 25 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7796 IH ‘‘(A) means any obligation or alleged obli- 1 gation that is or during the covered period be- 2 comes past due, other than an obligation aris- 3 ing out of a credit agreement entered into after 4 the effective date of this section, that arises out 5 of a transaction with a consumer; and 6 ‘‘(B) does not include a mortgage loan. 7 ‘‘(4) DEBT COLLECTOR.—The term ‘debt col- 8 lector’ means a creditor and any other person or en- 9 tity that engages in the collection of debt, including 10 the Federal Government and a State government, ir- 11 respective of whether the applicable debt is allegedly 12 owed to or assigned to such creditor, person, or enti- 13 ty. 14 ‘‘(5) MORTGAGE LOAN.—The term ‘mortgage 15 loan’ means a Federally backed mortgage loan (as 16 defined under section 4022 of the CARES Act) and 17 a Federally backed multifamily mortgage loan (as 18 defined under section 4023 of the CARES Act). 19 ‘‘(b) PROHIBITIONS.— 20 ‘‘(1) IN GENERAL.—Notwithstanding any other 21 provision of law, no debt collector may, during a cov- 22 ered period— 23 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7796 IH ‘‘(A) enforce a security interest securing a 1 debt through repossession, limitation of use, or 2 foreclosure; 3 ‘‘(B) take or threaten to take any action to 4 deprive an individual of their liberty as a result 5 of nonpayment of or nonappearance at any 6 hearing relating to an obligation owed by a con- 7 sumer; 8 ‘‘(C) collect any debt, by way of garnish- 9 ment, attachment, assignment, deduction, off- 10 set, or other seizure, from— 11 ‘‘(i) wages, income, benefits, bank, 12 prepaid or other asset accounts; or 13 ‘‘(ii) any assets of, or other amounts 14 due to, a consumer; 15 ‘‘(D) commence or continue an action to 16 evict a consumer from real or personal property 17 for nonpayment; 18 ‘‘(E) disconnect or terminate service from 19 a utility service, including electricity, natural 20 gas, telecommunications or broadband, water, 21 or sewer, for nonpayment; or 22 ‘‘(F) threaten to take any of the foregoing 23 actions. 24 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 7796 IH ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 1 this section may be construed to prohibit a consumer 2 from voluntarily paying, in whole or in part, a debt. 3 ‘‘(c) LIMITATION ON FEES AND INTEREST.—After 4 the expiration of a covered period, a debt collector may 5 not add to any past due debt any interest on unpaid inter- 6 est, higher rate of interest triggered by the nonpayment 7 of the debt, or fee triggered prior to the expiration of the 8 covered period by the nonpayment of the debt. 9 ‘‘(e) VIOLATIONS.—Any person or government entity 10 that violates this section shall be liable to the applicable 11 consumer as provided under section 813, except that, for 12 purposes of applying section 813— 13 ‘‘(1) such person or government entity shall be 14 deemed a debt collector, as such term is defined for 15 purposes of section 813; and 16 ‘‘(2) each dollar figure in such section shall be 17 deemed to be 10 times the dollar figure specified. 18 ‘‘(f) TOLLING.—Any applicable time limitations for 19 exercising an action prohibited under subsection (b) shall 20 be tolled during a covered period. 21 ‘‘(g) PREDISPUTE ARBITRATION AGREEMENTS.— 22 Notwithstanding any other provision of law, no predispute 23 arbitration agreement or predispute joint-action waiver 24 shall be valid or enforceable with respect to a dispute 25 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 7796 IH brought under this section, including a dispute as to the 1 applicability of this section, which shall be determined 2 under Federal law.’’. 3 (b) CLERICAL AMENDMENT.—The table of contents 4 for the Fair Debt Collection Practices Act is amended by 5 inserting after the item relating to section 812 the fol- 6 lowing: 7 ‘‘812A. Restrictions on collections of consumer debt during a national disaster or emergency.’’. SEC. 3. REPAYMENT PERIOD AND FORBEARANCE FOR CON- 8 SUMERS. 9 Section 812A of the Fair Debt Collection Practices 10 Act (15 U.S.C. 1692 et seq.), as added by section 2, is 11 amended— 12 (1) by inserting after subsection (c) the fol- 13 lowing: 14 ‘‘(d) REPAYMENT PERIOD.—After the expiration of 15 a covered period, a debt collector shall comply with the 16 following: 17 ‘‘(1) DEBT ARISING FROM CREDIT WITH A DE- 18 FINED PAYMENT PERIOD.—For any debt arising 19 from credit with a defined term, the debt collector 20 shall extend the time period to repay any past due 21 balance of the debt by— 22 ‘‘(A) 1 payment period for each payment 23 that a consumer missed during the covered pe- 24 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 7796 IH riod, with the payments due in the same 1 amounts and at the same intervals as the pre- 2 existing payment schedule; and 3 ‘‘(B) 1 payment period in addition to the 4 payment periods described under subparagraph 5 (A). 6 ‘‘(2) DEBT ARISING FROM AN OPEN END CRED- 7 IT PLAN.—For debt arising from an open end credit 8 plan, as defined in section 103 of the Truth in 9 Lending Act (15 U.S.C. 1602), the debt collector 10 shall allow the consumer to repay the past-due bal- 11 ance in a manner that does not exceed the amounts 12 permitted by the methods described in section 13 171(c) of the Truth in Lending Act (15 U.S.C. 14 1666i–1(c)) and regulations promulgated under that 15 section. 16 ‘‘(3) DEBT ARISING FROM OTHER CREDIT.— 17 ‘‘(A) IN GENERAL.—For debt not de- 18 scribed under paragraph (2) or (3), the debt 19 collector shall— 20 ‘‘(i) allow the consumer to repay the 21 past-due balance of the debt in substan- 22 tially equal payments over time; and 23 ‘‘(ii) provide the consumer with— 24 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 7796 IH ‘‘(I) for past due balances of 1 $2,000 or less, 12 months to repay, or 2 such longer period as the debt col- 3 lector may allow; 4 ‘‘(II) for past due balances be- 5 tween $2,001 and $5,000, 24 months 6 to repay, or such longer period as the 7 debt collector may allow; or 8 ‘‘(III) for past due balances 9 greater than $5,000, 36 months to 10 repay, or such longer period as the 11 debt collector may allow. 12 ‘‘(B) ADDITIONAL PROTECTIONS.—The Di- 13 rector of the Bureau may issue rules to provide 14 greater repayment protections to consumers 15 with debts described under subparagraph (A). 16 ‘‘(C) RELATION TO STATE LAW.—This 17 paragraph shall not preempt any State law that 18 provides for greater consumer protections than 19 this paragraph.’’; and 20 (2) by adding at the end the following: 21 ‘‘(h) FORBEARANCE FOR AFFECTED CONSUMERS.— 22 ‘‘(1) FORBEARANCE PROGRAM.—Each debt col- 23 lector that makes use of the credit facility described 24 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 7796 IH in paragraph (4) shall establish a forbearance pro- 1 gram for debts available during the covered period. 2 ‘‘(2) AUTOMATIC GRANT OF FORBEARANCE 3 UPON REQUEST.—Under a forbearance program re- 4 quired under paragraph (1), upon the request of a 5 consumer experiencing a financial hardship due, di- 6 rectly or indirectly, to COVID–19, the debt collector 7 shall grant a forbearance on payment of debt for 8 such time as needed until the end of the covered pe- 9 riod, with no additional documentation required 10 other than the borrower’s attestation to a financial 11 hardship caused by COVID–19 and with no fees, 12 penalties, or interest (beyond the amounts scheduled 13 or calculated as if the borrower made all contractual 14 payments on time and in full under the terms of the 15 loan contract) charged to the borrower in connection 16 with the forbearance. 17 ‘‘(3) EXCEPTION FOR CERTAIN MORTGAGE 18 LOANS SUBJECT TO THE CARES ACT.—This sub- 19 section shall not apply to a mortgage loan subject to 20 section 4022 or 4023 of the CARES Act.’’. 21 SEC. 4. CREDIT FACILITY. 22 Section 812A(h) of the Fair Debt Collection Prac- 23 tices Act (15 U.S.C. 1692 et seq.), as added by section 24 3, is amended by adding at the end the following: 25 VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 7796 IH ‘‘(4) CREDIT FACILITY.—The Board of Gov- 1 ernors of the Federal Reserve System shall— 2 ‘‘(A) establish a facility, using amounts 3 made available under section 4003(b)(4) of the 4 CARES Act (15 U.S.C. 9042(b)(4)), to make 5 long-term, low-cost loans to debt collectors to 6 temporarily compensate such debt collectors for 7 documented financial losses caused by forbear- 8 ance of debt payments under this subsection; 9 and 10 ‘‘(B) defer debt collectors’ required pay- 11 ments on such loans until after consumers’ debt 12 payments resume.’’. 13 Æ VerDate Sep 11 2014 20:41 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H7796.IH H7796 pamtmann on DSKBC07HB2PROD with BILLS