Consumers’ credit also needs protection from COVID-19, consumer group says
Mitigating financial fallout of coronavirus must take into account ordinary consumers, advocates say.
Amid the wrangling in Congress over what to do to halt the spread of the coronavirus and assist struggling businesses, a coalition of consumer groups wants to make sure ordinary people don’t see their credit destroyed by the financial upheaval.
The Consumer Federation of America, which includes more than 250 organizations, is calling for consumer-friendly measures including:
- Suspension of debt collections, including legal proceedings, wage garnishments, repossessions and selling of debt.
- A moratorium on negative credit reporting for at least four months, so out-of-work consumers who can’t pay their bills on time won’t see their credit destroyed.
- Forbearance of 180 days for homeowners struggling to pay their mortgages.
- A nationwide, 180-day halt to evictions of tenants suffering economic hardship and support for landlords who are losing income. Cook County Sheriff Tom Dart was an early adopter, announcing March 14 that he would halt court-ordered evictions during the crisis.
- Canceling student loan payments during the crisis. Senators Dick Durbin and Tammy Duckworth, both Illinois Democrats, want the federal government to immediately begin making borrowers’ payments during the health emergency, as well as cancel at least $10,000 in debt for all borrowers.
- A cap of 36 percent on high-interest loans, such as payday loans, tax refund anticipation loans and car title loans.
The consumer federation is also calling for any bailout of the travel industry to allow consumers to get cash refunds for airline tickets they no longer wish to use because of the virus.
And consumers should not have to lose fees paid in advance for lodging they won’t use, the group says.
Locally, some Chicago aldermen, Cook County commissioners and state legislators have been pushing “Right to Recovery” provisions to address basic needs, including 20 days of paid emergency leave, a halt on evictions and foreclosures and a legally-binding moratorium on utility shut-offs.