On April 6, 2020, the Chairwoman of the House Financial Services Committee, Maxine Waters, issued a broad memo outlining additional Democratic priorities for any subsequent Coronavirus relief package. Although more far-reaching, many of those proposals would directly impact consumers and the financial services industry, including:
- Support for Renters, Homeowners, and the Homeless:
During the Crisis
(1) Ban all evictions for nonpayment of rent regardless of whether the property has a federally backed loan. Tenants would be eligible to receive assistance through the Emergency Rental Assistance Fund to make rent payments.
(2) Provide $100 billion to help renters who are struggling to make their rent and utility payments on time.
(3) Suspend work and community service requirements, minimum rents, and time limits, to ensure that residents are not unduly burdened or compelled to leave their residence during the pandemic.
(4) Broaden the foreclosure and forbearance relief for homeowners and multifamily property owners with federally backed mortgages included in the CARES Act to include all homeowners and multifamily property owners.
(5) Provide liquidity to mortgage servicers that continue to advance principal and interest payments for the duration of the foreclosure moratorium and satisfy other loan modification requirements.
(6) Create a $35 billion fund to support lower income homeowners who may need additional assistance with utility payments, homeowners’ association fees, property taxes, and principal reductions, beyond the foreclosure and forbearance relief otherwise provided.
During the Recovery
(1) Authorize $100 billion to invest in the nation’s housing infrastructure through existing programs.
(2) Create a National Infrastructure Development Bank that would issue loans, loan guarantees, and tax-exempt bonds to support a wide range of transportation, housing, energy, environmental, and telecommunications projects.
(3) Provide homeowners or mission-focused single-family developers with a “first look” opportunity to purchase lower-value foreclosed homes in sales held by Housing and Urban Development (HUD) or the Government Sponsored Enterprises (GSEs).
(4) Extend the GSE Qualified Mortgage patch expiration date from January 2021 to January 2022.
(5) Clarify that any financial benefits derived from COVID-19 related legislation cannot be counted as income for the purposes of calculating rent for HUD and USDA-assisted renters.
(6) Ensure that the foreclosure moratorium applies to foreclosures already in progress.
- Helping Families and Protecting Consumers:
During the Crisis
(1) Require monthly payments of $2,000 per month for most adults and $1,000 for children to be funded by the Federal Reserve and paid monthly until the economy shows consistent job growth and the unemployment rate has, at least, returned to within 2 percentage points from the start of the present recession.
(2) Require insured depository institutions to cash federal stimulus checks for free.
(3) Suspend negative consumer credit reporting during the COVID-19 pandemic and other declared major disasters, plus 120 days. Consumers with continued hardship thereafter could apply for additional time. This provision would also permanently prohibit reporting medical debt arising from the cost of treatment for COVID-19 or medical expenses arising out of other declared major disasters.
(4) Eliminate the provision in the CARES Act that preempts state consumer protections related to credit reporting.
(5) Prohibit debt collectors from filing litigation or garnishing wages during the pandemic period, and for the following 120 days. It would also specifically protect all COVID-19 stimulus payments from debt collection actions and garnishment.
(6) Extend protections for federal student loan borrowers in the CARES Act to private student loan borrowers.
(7) Prohibit overdraft fees during the crisis on bank transactions, such as debit card transactions and ATM withdrawals.
During the Recovery
(1) Forgive the lesser of $10,000 or the balance of private student loans in a lump sum payment after the resumption of student borrower payments.
(2) Provide financial literacy education, including information on access to banking services and other financial products, for individuals seeking information and resources as they recover from COVID-19 and future major disasters.
(3) Aid borrowers resuming payments by amending the Truth in Lending Act (TILA) to require student loan servicers to provide accurate repayment options and resources, set minimum industry standards for student loans and servicing, and revise transfer and default disclosures.
(4) Prohibit lenders from including confessions of judgment clauses in the terms and conditions of loans provided during and up to one year after the pandemic.
PartnerMark Tyson is a member of the firm's Financial Services Litigation and Appellate practice groups where he focuses his practice on defending claims under the Truth-in-Lending Act, the Home Ownership and Equity Protection Act, the ...
