Major Consumer Protections Announced in Response to COVID-19

(Adopted from National Consumer Law Center, 3/24/2020)

Links to Foreclosure Moratoriums and Suspensions by the Major Mortgage Investors

Loan Modifications and Reporting

Federal Reserve, FDIC, NCUA, OCC, CFPB, and the Conference of State Bank Supervisors have issued an Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus.

Student Loans

Department of Education Press Release: All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days. In addition, each of these borrowers will have the option to suspend their payments for at least two months to allow them greater flexibility during the national emergency. This will allow borrowers to temporarily stop their payments without worrying about accruing interest.

Department of Education, Coronavirus and Forbearance Info for Students, Borrowers, and Parents: includes more detail on the suspension of interest accrual and loan payments, with additional Q & A on other topics relevant to students in school, student loan borrowers, and their parents.

Utilities

The FCC has obtained promises from over 1000 telecommunication companies to comply with the following guidelines for at least the next 60 days: not terminate service if the termination is based on an inability to pay caused by the COVID-19 epidemic; waive any late fees where late payment was caused by the epidemic; and open its Wi-Fi hotspots to the public. A list of the companies is found here: https://www.fcc.gov/keep-americans-connected .

NJ has imposed a moratorium on utility terminations.

Court Proceedings

U.S. Trustee Program Notice on Continuance of Section 341 Meetings:

All in-person chapter 7, 12, and 13 section 341 meetings scheduled through April 10, 2020, are hereby continued until a later date to be determined. Absent special circumstances, section 341 meetings may not proceed during this period except through telephonic or other alternative means not requiring personal appearance by debtors. Appropriate notice will be provided to parties in accordance with bankruptcy law and rules. Meetings already noticed as telephonic meetings may proceed as scheduled.

The impact of court closures on judicial foreclosures, collection actions, and the like.

Closure of courts to in-person hearings and limits on telephone/video hearings to essential matters may place a hold on judicial foreclosures, manufactured home replevin actions, collection lawsuits, and requests for post-judgment remedies. However, depending on their specific terms, these court closure orders and stays may not automatically stop the running of certain important deadlines, such as post-foreclosure redemption periods.

 

Is a debt collector a non-essential business?

When a state closes non-essential businesses, does this relate to debt collectors?

This may depend on the specific wording of a governor’s order. Nevada explicitly defines in state collectors as a non-essential business, but West Virginia’s order provides that they are an essential business. Another issue is that debt collectors may be calling from out-of-state, and thus whether they should be closed may depend on a closure order in their state of residence and not the state where the consumer resides. Also unclear is whether a vehicle repossession is in violation of a cease business order, and also whether the seizure in these conditions should be considered a breach of the peace.

 

Adopted from: National Consumer Law Center (March 24th, 2020)