A trio of law professors have published a paper that state and federal governments, as well as the Consumer Financial Protection Bureau can use as a playbook to support their arguments why all debt collection activities should be shut down during the coronavirus pandemic.
For Pamela Foohey, an Associate Professor at Indiana University, Dalie Jimenez, a professor at University of California, Irvine, and Christopher Odinet, an associate professor at Oklahoma University, “The Debt Collection Pandemic” which was published in The California Law Review is their second attempt at making their argument that debt collection should not be allowed on any level while individuals across the country are dealing with the crisis caused by COVID-19.
“The coronavirus pandemic is set to metastasize into a debt collection pandemic,” the professors write in their paper. “The federal government can and should do something to put a halt to debt collection until people can get back to work and earn money to pay their debts. Yet it has done nothing to help people deal with their debts.”
The best course of action, according to the professors is for Congress to exercise its authority under the Commerce Clause and “regulate” collection activities across the country.
Failing that, the CFPB should step in and issue guidance stating that any attempt to collect on a debt during the pandemic will be considered an “unfair or unconscionable act,” and that it will take enforcement action against any collector attempting to collect.
If neither Congress nor the CFPB decide to act, then the states should continue to step in as many have during the pandemic and use its Unfair Deceptive Acts or Practices (UDAP) authority to “police debt collection activities during the pandemic.”
Actions taken by the states to protect individuals from contracting coronavirus have “put millions of Americans at risk for debt collection,” the professors argue. “Congress and the CFPB owe it to American families — the people who have put their lives on the line and the people who have put their lives on hold — to ensure that one of the consequences of their actions is not to lose their homes, cars, and savings to debt collection.”
