[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3565 Introduced in Senate (IS)]
<DOC>
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.''.
<all>
Small Business and Consumer Debt Collection Emergency Relief Act of 2020
#3565 | S Congress #116
Policy Area: Finance and Financial Sector
Subjects: BankruptcyCardiovascular and respiratory healthCivil actions and liabilityConstitution and constitutional amendmentsConsumer creditDebt collectionDisaster relief and insuranceEmergency medical services and trauma careInfectious and parasitic diseasesInterest, dividends, interest ratesPublic utilities and utility ratesSmall business
Last Action: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (3/22/2020)
Bill Text Source: Congress.gov
Summary and Impacts
Original Text