Collections and Repossessions Bill that Prohibits All Activity Hits the Senate Floor!

Today, a sweeping amendment to the Fair Debt Collections Act (FDCPA) was introduced into the senate as a bill by Senator Sherrod Brown (D) OH, that creates a moratorium on all collections and repossession activity during a major national disaster or emergency. The bill was just introduced to the floor and no known date for this going to vote is yet set. If set in motion, all debt collections activity and repossession would grind to a virtual halt.

Read the Bill Here!

One interesting provision of the bill requires prior consent for telephonic communications, otherwise, collectors would only be allowed to communicate with consumers in writing during a major disaster or emergency and can only be for the purpose of communicating for informational purposes and not a collections effort.

This sweeping bill appears to have emanated from the Maxine Waters proposal that was introduced as a proposal last week on March 19th. While still facing major obstacles at the White House, it should sail through Congress. Sentiment to these actions does seem to be gaining momentum. Just like the Waters proposal, the bill covers a period of time beginning one day after a Presidential declaration of a major disaster and stays in affect until 120 days after the end of the disaster period.

Included in the bill are certain well spelled out prohibitions;

PROHIBITIONS.— 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 non-payment of the debt;

(D) sue or threaten to sue for non-18 payment 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 3 to enforce collection, or any adverse action for nonpayment of a debt, or for nonappearance at any hearing relating to a debt;