Consumer Relief during COVID-19 Act

To amend the Fair Debt Collection Practices Act to restrict collections of consumer debt during a national disaster or emergency, and for other purposes. 1. Short title This Act may be cited as the Consumer Relief during COVID–19 Act 2. Restrictions on collections of consumer debt during a national disaster or emergency (a) In general The Fair Debt Collection Practices Act ( 15 U.S.C. 1692 15 U.S.C. 1692j 812A. Restrictions on collections of consumer debt during a national disaster or emergency (a) Definitions In this section: (1) Covered period The term covered period 42 U.S.C. 4121 (2) Creditor The term creditor (A) who offers or extends credit creating a debt or to whom a debt is owed; or (B) to whom any obligation for payment is owed. (3) Debt The term debt (A) means any obligation or alleged obligation that is or during the covered period becomes past due, other than an obligation arising out of a credit agreement entered into after the effective date of this section, that arises out of a transaction with a consumer; and (B) does not include a mortgage loan. (4) Debt collector The term debt collector (5) Mortgage loan The term mortgage loan (b) Prohibitions (1) In general Notwithstanding any other provision of law, no debt collector may, during a covered period— (A) enforce a security interest securing a debt through repossession, limitation of use, or foreclosure; (B) take or threaten to take any action to deprive an individual of their liberty as a result of nonpayment of or nonappearance at any hearing relating to an obligation owed by a consumer; (C) collect any debt, by way of garnishment, attachment, assignment, deduction, offset, or other seizure, from— (i) wages, income, benefits, bank, prepaid or other asset accounts; or (ii) any assets of, or other amounts due to, a consumer; (D) commence or continue an action to evict a consumer from real or personal property for nonpayment; (E) disconnect or terminate service from a utility service, including electricity, natural gas, telecommunications or broadband, water, or sewer, for nonpayment; or (F) threaten to take any of the foregoing actions. (2) Rule of construction Nothing in this section may be construed to prohibit a consumer from voluntarily paying, in whole or in part, a debt. (c) Limitation on fees and interest After the expiration of a covered period, a debt collector may not add to any past due debt any interest on unpaid interest, higher rate of interest triggered by the nonpayment of the debt, or fee triggered prior to the expiration of the covered period by the nonpayment of the debt. (e) Violations Any person or government entity that violates this section shall be liable to the applicable consumer as provided under section 813, except that, for purposes of applying section 813— (1) such person or government entity shall be deemed a debt collector, as such term is defined for purposes of section 813; and (2) each dollar figure in such section shall be deemed to be 10 times the dollar figure specified. (f) Tolling Any applicable time limitations for exercising an action prohibited under subsection (b) shall be tolled during a covered period. (g) Predispute arbitration agreements Notwithstanding any other provision of law, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a dispute brought under this section, including a dispute as to the applicability of this section, which shall be determined under Federal law. . (b) Clerical amendment The table of contents for the Fair Debt Collection Practices Act is amended by inserting after the item relating to section 812 the following: 812A. Restrictions on collections of consumer debt during a national disaster or emergency. . 3. Repayment period and forbearance for consumers Section 812A of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692 (1) by inserting after subsection (c) the following: (d) Repayment period After the expiration of a covered period, a debt collector shall comply with the following: (1) Debt arising from credit with a defined payment period For any debt arising from credit with a defined term, the debt collector shall extend the time period to repay any past due balance of the debt by— (A) 1 payment period for each payment that a consumer missed during the covered period, with the payments due in the same amounts and at the same intervals as the pre-existing payment schedule; and (B) 1 payment period in addition to the payment periods described under subparagraph (A). (2) Debt arising from an open end credit plan For debt arising from an open end credit plan, as defined in section 103 of the Truth in Lending Act ( 15 U.S.C. 1602 15 U.S.C. 1666i–1(c) (3) Debt arising from other credit (A) In general For debt not described under paragraph (2) or (3), the debt collector shall— (i) allow the consumer to repay the past-due balance of the debt in substantially equal payments over time; and (ii) provide the consumer with— (I) for past due balances of $2,000 or less, 12 months to repay, or such longer period as the debt collector may allow; (II) for past due balances between $2,001 and $5,000, 24 months to repay, or such longer period as the debt collector may allow; or (III) for past due balances greater than $5,000, 36 months to repay, or such longer period as the debt collector may allow. (B) Additional protections The Director of the Bureau may issue rules to provide greater repayment protections to consumers with debts described under subparagraph (A). (C) Relation to State law This paragraph shall not preempt any State law that provides for greater consumer protections than this paragraph. ; and (2) by adding at the end the following: (h) Forbearance for affected consumers (1) Forbearance program Each debt collector that makes use of the credit facility described in paragraph (4) shall establish a forbearance program for debts available during the covered period. (2) Automatic grant of forbearance upon request Under a forbearance program required under paragraph (1), upon the request of a consumer experiencing a financial hardship due, directly or indirectly, to COVID–19, the debt collector shall grant a forbearance on payment of debt for such time as needed until the end of the covered period, with no additional documentation required other than the borrower’s attestation to a financial hardship caused by COVID–19 and with no fees, penalties, or interest (beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the loan contract) charged to the borrower in connection with the forbearance. (3) Exception for certain mortgage loans subject to the CARES Act This subsection shall not apply to a mortgage loan subject to section 4022 or 4023 of the CARES Act. . 4. Credit facility Section 812A(h) of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692 (4) Credit facility The Board of Governors of the Federal Reserve System shall— (A) establish a facility, using amounts made available under section 4003(b)(4) of the CARES Act ( 15 U.S.C. 9042(b)(4) (B) defer debt collectors’ required payments on such loans until after consumers’ debt payments resume. .

Summary: Consumer Relief during COVID-19 Act This bill places restrictions on the collection of consumer debts during the COVID-19 (i.e., coronavirus disease 2019) emergency period and for 120 days after this period. Among other things, debt collectors may not during this period enforce a security interest through a repossession, seize assets, commence or continue an eviction, terminate utility service, or charge fees or apply a higher interest rate as a result of nonpayment. After this period, debt collectors must provide certain repayment options including extending the repayment period for debts. The bill also provides for forbearance programs established by creditors for consumers experiencing a financial hardship due to COVID-19. The Federal Reserve Board must establish a credit facility to make long-term, low-cost loans to these creditors for losses caused by any forbearance of payments.