The credit and collection industry may have been premature to breathe a sigh of relief when the CARES Act was signed into law and did not specifically prohibit the collection of debt n any form, especially if Democrats in Congress have their way.
In an op-ed column that was published in today’s New York Times, Sen. Elizabeth Warren [D-Mass.] lays out a series of steps that the federal government needs to take to help individuals continue to deal with the fallout of the coronavirus pandemic. One of those steps is the suspension of consumer debt collection. Not to be outdone, the House Financial Services Committee, under the watch of Rep. Maxine Waters [D-Calif.] has drafted a proposal that calls the CARES Act a “down payment on the relief that is needed” and lays out a series of additional measures that are needed. As you might be able to guess, that proposal includes a moratorium on debt collection.
It is clear that Congress does not feel like its job is done and that more relief is needed for Americans. Exactly what form that relief takes is still very much in the air and subject to change. But the industry should not let its guard down and should continue to lobby against any outright ban on consumer collections.
But even if Congress elects not to prohibit collections in its next stimulus package, the industry still needs to worry about states that may do it on their own. Already, Massachusetts and Washington, D.C., have enacted emergency regulations that dramatically restrict how individuals can be contacted about their debts. It’s unrealistic to think that other states, especially those who have Attorneys General who are Democrats (looking at you Illinois, California, and New York to name a few of the big ones) will not follow suit.
The industry can not stray from the changes it has made in the past three weeks in response to the COVID-19 crisis. Empathy, education, easy-going, and even-tempered are the watch words that should govern all interactions between collectors and consumers. The industry does not need to give lawmakers any additional reasons to target the collection industry.
