Title: To provide for a temporary debt collection moratorium during the COVID-19 emergency period, and for other purposes.
Policy area: Finance and Financial Sector

Summary:
This bill places restrictions on the collection of debt owed by a consumer, nonprofit organization, or small business during the COVID-19 (i.e., coronavirus disease 2019) emergency period and the following 120 days. Among other things, debt collectors may not during this period
The bill also prohibits during this period a confession of judgment or similar agreement as a condition to a loan or extension of credit. (A confession of judgment is an agreement to a judgment of liability without notice and opportunity to be heard in court in the event of the default of a borrower.)

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6423 Introduced in House (IH)]

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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 during the COVID-
              19 emergency period, and for other purposes.

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

SECTION 1. DEBT COLLECTION.

    (a) Temporary Debt Collection Moratorium During the COVID-19 
Emergency Period.--
            (1) In general.--The Fair Debt Collection Practices Act (15 
        U.S.C. 1692 et seq.) is amended by inserting after section 812 
        the following:
``Sec. 812A. Temporary debt collection moratorium during the COVID-19 
              emergency period
    ``(a) Definitions.--In this section:
            ``(1) Consumer.--The term `consumer' means any natural 
        person obligated or allegedly obligated to pay any debt.
            ``(2) COVID-19 emergency period.--The term `COVID-19 
        emergency period' means the period that begins upon the date of 
        the enactment of this Act and ends upon the date of the 
        termination by the Federal Emergency Management Administration 
        of the emergency declared on March 13, 2020, by the President 
        under the Robert T. Stafford Disaster Relief and Emergency 
        Assistance Act (42 U.S.C. 4121 et seq.) relating to the 
        Coronavirus Disease 2019 (COVID-19) pandemic.
            ``(3) Creditor.--The term `creditor' means any person who 
        offers or extends credit creating a debt or to whom a debt is 
        owed or other obligation of payment.
            ``(4) Debt.--The term `debt'--
                    ``(A) means any past due obligation or alleged 
                obligation of a consumer, non-profit organization, or 
                small business to pay money--
                            ``(i) arising out of a transaction in which 
                        the money, property, insurance, or services 
                        which are the subject of the transaction are 
                        primarily for personal, family, business, non-
                        profit, or household purposes, whether or not 
                        such obligation has been reduced to judgment; 
                        and
                            ``(ii) owed to a local, State, or Federal 
                        government; and
                    ``(B) does not include federally related mortgages 
                (as defined under section 3 of the Real Estate 
                Settlement Procedures Act of 1974) unless a deficiency 
                judgment has been made with respect to such federally 
                related mortgage.
            ``(5) Debt collector.--The term `debt collector' includes a 
        creditor and any person or entity that engages in the 
        collection of debt (including the Federal Government or a State 
        government) whether or not the debt is allegedly owed to or 
        assigned to that person or entity.
            ``(6) Depository institution.--The term `depository 
        institution'--
                    ``(A) has the meaning given that term under section 
                3 of the Federal Deposit Insurance Act; and
                    ``(B) means a Federal or State credit union (as 
                such terms are defined, respectively, under section 101 
                of the Federal Credit Union Act).
            ``(7) Non-profit organization.--The term `non-profit 
        organization' means an organization described in section 
        501(c)(3) of the Internal Revenue Code of 1986 and exempt from 
        taxation under subsection (a) of such section.
            ``(8) Small business.--The term `small business' has the 
        meaning given the term `small business concern' under section 3 
        of the Small Business Act (15 U.S.C. 632).
    ``(b) Prohibitions.--Notwithstanding any other provision of law, 
during COVID-19 emergency period and the 120-day period immediately 
following, a debt collector is prohibited from--
            ``(1) capitalizing or adding extra interest or fees 
        triggered by the non-payment of an obligation by a consumer, 
        small business, or non-profit organization to the balance of an 
        account;
            ``(2) suing or threatening to sue a consumer, small 
        business, or non-profit for a past-due debt;
            ``(3) continuing litigation initiated before the date of 
        enactment of this section to collect a debt from a consumer, 
        small business, or non-profit organization;
            ``(4) enforcing a security interest, including through 
        repossession or foreclosure, against a consumer, small 
        business, or non-profit organization;
            ``(5) reporting a past due debt of a consumer, small 
        business, or non-profit organization to a consumer reporting 
        agency;
            ``(6) taking or threatening to take any action to enforce 
        collection, or any adverse action against a consumer, small 
        business, or non-profit organization for non-payment or for 
        non-appearance at any hearings related to a debt;
            ``(7) except with respect to enforcing an order for child 
        support or spousal support, initiating or continuing any action 
        to cause or to seek to cause the collection of a debt from 
        wages, Federal benefits, or other amounts due to a consumer, 
        small business, or non-profit organization, by way of 
        garnishment, deduction, offset, or other seizure, or to cause 
        or seek to cause the collection of a debt by seizing funds from 
        a bank account or any other assets held by such consumer, small 
        business, or non-profit organization;
            ``(8) in the case of action or collection described under 
        paragraph (7) that was initiated prior to the beginning of the 
        date of such disaster or emergency, failing to suspend the 
        action or collection until 120 days after the end of the COVID-
        19 emergency period;
            ``(9) upon the termination of the incident period for such 
        disaster or emergency, failing to extend the time period to pay 
        an obligation by one payment period for each payment that a 
        consumer, small business, or non-profit organization missed 
        during the incident period, with the payments due in the same 
        amounts and at the same intervals as the pre-existing payment 
        schedule of the consumer, small business, or non-profit 
        organization (as applicable) or, if the debt has no payment 
        periods, allow the consumer, small business, or non-profit a 
        reasonable time in which to repay the debt in affordable 
        payments;
            ``(10) disconnecting a consumer, small business, or non-
        profit organization from a utility prepaid or post-paid 
        electricity, natural gas, telecommunications, broadband, water, 
        or sewer service; or
            ``(11) exercising a right to set off provision contained in 
        any consumer, small business, or non-profit organization 
        account agreement with a depository institution.
    ``(c) Violation.--Any person who violates a provision of this 
section shall--
            ``(1) be treated as a debt collector for purposes of 
        section 813; and
            ``(2) be liable to the consumer, small business, or non-
        profit organization an amount equal to 10 times the damages 
        allowed under section 813 for each such violation.''.
            (2) Table of contents amendment.--The table of contents at 
        the beginning of the Fair Debt Collection Practices Act (15 
        U.S.C. 1692 et seq.) is amended by inserting after the item 
        relating to section 812 the following new item:

``812A. Temporary debt collection moratorium during the COVID-19 
                            emergency period.''.
    (b) Confessions of Judgment Prohibition.--
            (1) In general.--Chapter 2 of the Truth in Lending Act (15 
        U.S.C. 1631 et seq.) is amended--
                    (A) by adding at the end the following:
``Sec. 140B. Confessions of judgment prohibition
    ``(a) In General.--During a period described under section 812A(b) 
of the Fair Debt Collection Practices Act, no person may directly or 
indirectly take or receive from another person or seek to enforce an 
obligation that constitutes or contains a cognovit or confession of 
judgment (for purposes other than executory process in the State of 
Louisiana), warrant of attorney, or other waiver of the right to notice 
and the opportunity to be heard in the event of suit or process 
thereon.
    ``(b) Exemption.--The exemption in section 104(1) shall not apply 
to this section.
    ``(c) Debt Defined.--In this section, the term `debt' means any 
obligation of a person to pay to another person money--
            ``(1) regardless of whether the obligation is absolute or 
        contingent, if the understanding between the parties is that 
        any part of the money shall be or may be returned;
            ``(2) that includes the right of the person providing the 
        money to an equitable remedy for breach of performance if the 
        breach gives rise to a right to payment; and
            ``(3) regardless of whether the obligation or right to an 
        equitable remedy described in paragraph (2) has been reduced to 
        judgment or is fixed, contingent, matured, unmatured, disputed, 
        undisputed, secured, or unsecured.''; and
                    (B) in the table of contents for such chapter, by 
                adding at the end the following:

``140B. Confessions of judgment prohibition.''.
            (2) Conforming amendment.--Section 130(a) of the Truth in 
        Lending Act (15 U.S.C. 1640(a)) is amended by adding at the end 
        the following: ``For purposes of this section, the term 
        `creditor' refers to any person charged with compliance.''.
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