Title: Small Business and Consumer Debt Collection Emergency Relief Act of 2020
Policy area: Finance and Financial Sector

Summary:
Small Business and Consumer Debt Collection Emergency Relief Act of 2020
This bill places restrictions on the collection of consumer and small business debts during a major disaster or emergency, including during the COVID-19 (i.e., coronavirus disease 2019) emergency period. Among other things, debt collectors may not during such a period
After such a period, debt collectors must provide certain repayment options including extending the repayment period for debts.
Violations of these provisions are subject to civil enforcement.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3565 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 3565

 To amend the Fair Debt Collection Practices Act to provide additional 
     protections for consumers and small business owners from debt 
            collection during a major disaster or emergency.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 22, 2020

   Mr. Brown introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To amend the Fair Debt Collection Practices Act to provide additional 
     protections for consumers and small business owners from debt 
            collection during a major disaster or emergency.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business and Consumer Debt 
Collection Emergency Relief Act of 2020''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the collection of debts involves the use of the mails 
        and wires and other instrumentalities of interstate commerce;
            (2) at times of major disaster or emergency, the income of 
        consumers and small businesses is often impaired and their 
        necessary daily expenses often increase;
            (3) temporary forbearance on debt collection is critical to 
        fostering economic recovery and stability in the wake of major 
        disasters or emergencies;
            (4) temporary forbearance benefits not only consumer and 
        small business debtors, but also other creditors by avoiding 
        downward collateral price spirals triggered by an increase in 
        foreclosure activity;
            (5) without forbearance, many consumers and small 
        businesses are unlikely to be able to pay their obligations 
        according to their original terms and are likely to default on 
        obligations or file for bankruptcy, resulting in reduced 
        recoveries for creditors, and in the case of bankruptcy, no 
        recovery of unaccrued interest;
            (6) with forbearance, creditors are likely to realize 
        greater long-term value because consumers and small businesses 
        will be more likely to be able to repay their obligations after 
        the major disaster or emergency has subsided;
            (7) the legislative and administrative response to major 
        disasters and emergencies may consist of multiple components 
        divided among different statutes and programs; and
            (8) when evaluating whether property has been taken from a 
        person without just compensation, a holistic evaluation of the 
        burdens and benefits of all legislative and administrative 
        responses, including indirect benefits from macroeconomic 
        stabilization, is appropriate.

SEC. 3. RESTRICTIONS ON COLLECTIONS OF DEBT DURING A NATIONAL DISASTER 
              OR EMERGENCY.

    (a) In General.--The Fair Debt Collection Practices Act (15 U.S.C. 
1692 et seq.) is amended by inserting after section 812 (15 U.S.C. 
1692j) the following:
``Sec. 812A. Restrictions on collections of debt during national 
              disaster or emergency
    ``(a) Definitions.--In this section:
            ``(1) The term `consumer' means any individual obligated or 
        allegedly obligated to pay any debt;
            ``(2) The term `covered period'--
                    ``(A) means--
                            ``(i) the period beginning on the date that 
                        is 1 day after the date on which a major 
                        disaster is declared by the President under 
                        section 401 of the Robert T. Stafford Disaster 
                        Relief and Emergency Assistance Act (42 U.S.C. 
                        5170), where assistance is authorized under 
                        section 408 of that Act (42 U.S.C. 5174), and 
                        ending 120 days after the end of the incident 
                        period for that disaster; or
                            ``(ii) the period beginning on the date 
                        that is 1 day after the date on which an 
                        emergency involving Federal primary 
                        responsibility is determined to exist by the 
                        President under section 501(b) of the Robert T. 
                        Stafford Disaster Relief and Emergency 
                        Assistance Act (42 U.S.C. 5191(b)) that 
                        simultaneously covers all States for a single 
                        incident, event, or emergency, and ending 120 
                        days after the end of the incident period for 
                        that emergency; and
                    ``(B) includes the period beginning on the date 
                that is 1 day after the date of enactment of this Act 
                and ending on the date that is 120 days after the end 
                of the incident period with respect to the emergency 
                involving Federal primary responsibility determined to 
                exist by the President under the section 501(b) of the 
                Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act (42 U.S.C. 5191(b)) with respect to the 
                coronavirus disease 2019 (COVID-19).
            ``(3) The term `creditor' means--
                    ``(A) any person who offers or extends credit 
                creating a debt or to whom a debt is owed or other 
                obligation for payment;
                    ``(B) any lessor of real or personal property; or
                    ``(C) any provider of utility services.
            ``(4) The term `debt'--
                    ``(A) means any obligation or alleged obligation 
                that is or during the covered period becomes past due--
                            ``(i) for which the original agreement, of 
                        if there is no agreement, the original 
                        obligation to pay was created before the 
                        covered period, whether or not such obligation 
                        has been reduced to judgment; and
                            ``(ii) that arises out of a transaction--
                                    ``(I) with a consumer; or
                                    ``(II) with a small business; and
                    ``(B) does not include a federally related mortgage 
                loan.
            ``(5) The term `debt collector' means a creditor, and any 
        person or entity that engages in the collection of debt, 
        including the Federal Government and a State government, 
        irrespective of whether the debt is allegedly owed to or 
        assigned to that person or to the entity.
            ``(6) The term `federally related mortgage loan' has the 
        meaning given the term in section 3 of the Real Estate 
        Settlement Procedures Act of 1974 (12 U.S.C. 2602).
            ``(7) The term `major disaster or emergency' means--
                    ``(A) a major disaster declared by the President 
                under section 401 of the Robert T. Stafford Disaster 
                Relief and Emergency Assistance Act (42 U.S.C. 5170), 
                where assistance is authorized under section 408 of 
                such Act (42 U.S.C. 5174); or
                    ``(B) an emergency involving Federal primary 
                responsibility that is determined to exist by the 
                President under section 501(b) of the Robert T. 
                Stafford Disaster Relief and Emergency Assistance Act 
                (42 U.S.C. 5191(b)) that simultaneously covers all 
                States for a single incident, event, or emergency.
            ``(8) The term `small business' has the meaning given the 
        term `small business concern' in section 3 of the Small 
        Business Act (15 U.S.C. 632).
    ``(b) Prohibitions.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, no debt collector may during a covered period, relating to 
        a debt owed by a consumer or small business--
                    ``(A) capitalize unpaid interest;
                    ``(B) apply a higher interest rate triggered by the 
                nonpayment of the debt to the debt balance;
                    ``(C) charge a fee triggered by the nonpayment of 
                the debt;
                    ``(D) sue or threaten to sue for nonpayment of a 
                debt;
                    ``(E) continue litigation to collect a debt that 
                was initiated before the date of enactment of this 
                section;
                    ``(F) submit or cause to be submitted a confession 
                of judgment to any court;
                    ``(G) enforce a security interest through 
                repossession, limitation of use, or foreclosure;
                    ``(H) take or threaten to take any action to 
                enforce collection, or any adverse action for 
                nonpayment of a debt, or for nonappearance at any 
                hearing relating to a debt;
                    ``(I) commence or continue any action to cause or 
                to seek to cause the collection of a debt, including 
                pursuant to a court order issued before the covered 
                period, from wages, Federal benefits, or other amounts 
                due to a consumer or small business, by way of 
                garnishment, deduction, offset, or other seizure;
                    ``(J) cause or seek to cause the collection of a 
                debt, including pursuant to a court order issued before 
                the covered period, by levying on funds from a bank 
                account or seizing any other assets of a consumer or a 
                small business;
                    ``(K) commence or continue an action to evict a 
                consumer or small business from real or personal 
                property; or
                    ``(L) disconnect or terminate service from utility 
                service, including electricity, natural gas, 
                telecommunications or broadband, water, or sewer.
            ``(2) Rule of construction.--Nothing in this section may be 
        construed to prohibit a consumer or small business from 
        voluntarily paying, in whole or in part, a debt.
    ``(c) Repayment Period.--After the expiration of a covered period, 
a debt collector shall--
            ``(1) not add to the past due balance any interest or fee 
        prohibited by subsection (b);
            ``(2) for any debt with a defined payment period, extend 
        the time period to repay the past-due balance of the debt by 1 
        payment period for each payment that a consumer or small 
        business missed during the covered period, with the payments 
        due in the same amounts and at the same intervals as the pre-
        existing payment schedule;
            ``(3) for an open end credit plan, as defined in section 
        103 of the Truth in Lending Act (15 U.S.C. 1602), or other 
        credit plan without a defined term, allow the consumer or small 
        business to repay the past-due balance in a manner that does 
        not exceed the amounts permitted by the methods described in 
        section 171(c) of the Truth in Lending Act (15 U.S.C. 1666i-
        1(c)) and regulations promulgated under that section; or
            ``(4) shall, if the debt has no payment periods, allow the 
        consumer or small business a reasonable time in which to repay 
        the debt in affordable payments.
    ``(d) Communications in Connection With the Collection of a Debt.--
            ``(1) In general.--Without prior consent of the consumer or 
        small business given directly to the debt collector during a 
        covered period, or the express permission of a court of 
        competent jurisdiction, a debt collector shall only communicate 
        in writing in connection with the collection of any debt.
            ``(2) Required disclosures.--
                    ``(A) In general.--All written communications under 
                paragraph (1) shall inform the consumer or small 
                business that the communication is for informational 
                purposes and is not an attempt to collect a debt.
                    ``(B) Requirements.--The disclosure required under 
                subparagraph (A) shall be made--
                            ``(i) in type or lettering not smaller than 
                        14-point bold type;
                            ``(ii) separate from any other disclosure; 
                        and
                            ``(iii) in a manner designed to ensure that 
                        the recipient sees the disclosure clearly.
    ``(e) Violation.--Any person who violates this section shall--
            ``(1) except as provided in paragraph (2), be subject to 
        civil liability in accordance with section 813 as if the person 
        is a debt collector for purposes of that section; and
            ``(2) be liable in an amount not greater than 10 times the 
        amounts described in section 813.
    ``(f) Tolling.--Except as provided in section (g)(5), any 
applicable time limitations, including statutes of limitations, related 
to a debt under Federal or state law shall be tolled during the covered 
period.
    ``(g) Claims of Affected Creditors and Debt Collectors.--
            ``(1) Claim.--A creditor or debtor may bring an action in 
        an appropriate bankruptcy court of the United States--
                    ``(A) asserting a taking under the Fifth Amendment 
                to the Constitution of the United States as a result of 
                this section; or
                    ``(B) seeking a declaratory judgment regarding the 
                constitutionality of this section.
            ``(2) Exclusive jurisdiction.--The bankruptcy courts of the 
        United States shall have exclusive jurisdiction over an action 
        brought under this subsection.
            ``(3) Final judgment.--The bankruptcy court may--
                    ``(A) enter a final judgment upon consent of the 
                parties; or
                    ``(B) may issue a report and recommendation, which 
                shall be subject to de novo review in the appropriate 
                district court of the United States.
            ``(4) Valuation of property.--In an action described in 
        under this subsection, the value of the property alleged to 
        have been taken without just compensation shall be evaluated--
                    ``(A) with consideration of the likelihood of full 
                and timely payment of the obligation without the 
                actions taken pursuant to this section; and
                    ``(B) without consideration of any assistance 
                provided directly or indirectly to the consumer or 
                small business from under any legislation enacted in 
                response to a major disaster or emergency.
            ``(5) Scope of just compensation.--In an action under this 
        subsection, any assistance or benefit provided directly or 
        indirectly to the any creditor or debt collector under any 
        legislation enacted in response to a major disaster or 
        emergency shall be deemed to be compensation for the property 
        taken, even if such assistance or benefit is not specifically 
        provided as compensation for property taken by this section.
            ``(6) Appeals.--Any appeal from an action under this 
        subsection shall be treated under section 158 of title 28, 
        United States Code, as if it were an appeal in a case under 
        title 11, United States Code.
            ``(7) Repose.--Any action asserting a taking under the 
        Fifth Amendment to the Constitution of the United States as a 
        result of this subsection shall be brought within not later 
        than 180 days after the end of the covered period.
    ``(h) 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) Severability.--If any provision of this Act or the application 
of such provision to any person or circumstance is held to be invalid 
or unconstitutional, the remainder of this Act and the application of 
the provisions of this Act to any person or circumstance shall not be 
affected thereby.
    (c) Technical and Conforming 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 debt during national disaster or 
                            emergency.''.
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