Congress Has More to Do to Aid Consumers, Workers Blindsided by COVID-19
The COVID-19 (coronavirus) emergency is upending the lives of people across the world. Many are falling ill in growing numbers; millions have lost, or are at risk of losing their jobs; health care workers are desperate for more resources to care for their patients; and everyone else is quarantined at home. Despite the $2 trillion stimulus bill that the U.S. Senate passed Wednesday night (98–0) to alleviate some of the damage from the pandemic, Congress has much more work to do to protect consumers and workers affected by this growing catastrophe.
The Coronavirus Aid, Relief, and Economic Security Act’’ or the ‘‘CARES Act,” which likely will become law after U.S. House passage and the president’s signature, provides limited relief for individuals, some relief for hospitals, social programs, and small businesses, and notably a big bonanza for large businesses. Unfortunately, the legislation lacks adequate consumer protections.
While the CARES Act was in negotiations, members of Congress introduced various bills specifically to help consumers during the crisis. This included proposals to suspend rental payments for renters in assisted housing; to ban all evictions and foreclosures during the pandemic; to provide relief for consumers on their non-mortgage credit payments; to prohibit debt collection, repossession and garnishment of wages during the pandemic; to prohibit negative consumer credit reporting; to require the government to make student loan payments; and to forgive student loan debt.
None of those protections made it to the CARES Act. Any semblance of consumer protection in the final legislation are mostly limited to the following provisions:
· $50 million in funding for the Legal Services Corporation to provide civil legal services for low-income Americans. This funding will be necessary in aiding people facing the consequences of the pandemic, including consumer scams, job loss, evictions, and domestic violence.
· Creation of a temporary Pandemic Unemployment Assistance program through December 31, 2020 to provide payment to those not traditionally eligible for unemployment benefits, such as self-employed, independent contractors, and others who are impacted by COVID-19.
· All U.S. residents with adjusted gross income up to $75,000 — $99,000 ($150,000 married), who are not dependents of another taxpayer and have a work eligible social security number, are eligible for a $1,200 ($2,400 married) tax rebate, which reduces as salary goes up.
· Credit furnishers who agree to account forbearance or modified payments for a consumer impacted by COVID-19 must report the consumer’s account as “current” to credit reporting agencies. If the consumer was not current, the furnisher must continue to report the same status during the accommodation period unless the consumer becomes current.
· Foreclosures on all federally-backed mortgage loans are prohibited for a 60-day period beginning on March 18, 2020. Borrowers of a federally-backed mortgage loan (includes mortgages purchased by Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA) who have experienced a financial hardship related to the COVID-19 emergency may apply for up to 180 days of forbearance.
· Multifamily borrowers with a federally backed multifamily mortgage loan who experience financial hardship from COVID-19 may apply for up to 90 days of forbearance. Borrowers receiving forbearance may not evict or charge late fees to tenants for the duration of the forbearance period. Applicable mortgages include loans for real property designed for 5 or more families that are purchased, insured, or assisted by Fannie Mae, Freddie Mac, or HUD.
· For 120 days, landlords are prohibited from initiating legal action to evict or to charge fees, penalties, or other charges to the tenant related to nonpayment of rent where the landlord’s mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.
· Students with federally-held student loans may have payments suspended for six months. During this time, no interest or fees may accrue and no negative credit-reporting is permitted. The period of time the loans are suspended will still count towards loan forgiveness and rehabilitation programs.
· Involuntary debt collection, such as wage garnishment or tax refund offsets, on federally-held student loans is halted for 60 days.
With no end currently in sight for this pandemic, Congress will have to follow up with more meaningful protections in the near future to tackle the economic crisis. Consumers and workers will need much more support and assistance from their elected officials to take on what is yet to come
