WASHINGTON–Two consumer groups said that while the $2-trillion stimulus package passed by Congress will provide aid for many, it continues to “fall short” when it comes to consumer protection.
"While the Senate package contains some first steps to relieve the economic crisis, many families will continue to struggle and will be unable to meet basic needs without further action,” said National Consumer Law Center Associate Director Lauren Saunders. “The enhanced unemployment benefits, stimulus payments, and temporary relief for some mortgage and student loan borrowers are welcome, but many people are left out. The bill fails to provide the widespread relief critically needed to stop foreclosures, evictions, utility shutoffs, bank account garnishments, car repossessions, harsh enforcement of government fines and fees, relief for student loan borrowers, and debt collection activities in general. The bill won’t stop severe consequences for American families who are struggling with debt, have little to no savings, are being crushed by the economic fallout, and have rent, mortgages, student loans, utilities, and other bills to pay on April 1 and in the weeks to come.”
The NCLC said the legislation also lacks protection against predatory lenders who will exploit the crisis, such as the temporary interest rate cap protections proposed by Senators Van Hollen and Brown.
According to NCLC, some positive elements of the package include increased unemployment compensation, additional support for civil legal aid programs, funding to help low-income families with heating bills, some bankruptcy protections, and assistance for small businesses, along with some — “but inadequate” — relief for homeowners and student loan borrowers.
Little Help on Mortgages
“Congress has missed a crucial chance to provide fair, workable protections for the housing market, although the package includes the already-announced policies of a brief foreclosure moratorium and payment forbearance for homeowners with government-backed loans,” said National Consumer Law Center staff attorney Alys Cohen in a statement. “Given the severity of this crisis, homeowners will need a foreclosure halt beyond two months. And the burden remains on borrowers to contact their mortgage companies for assistance even though experience makes clear that homeowners will face clogged phone lines and widespread servicer errors, resulting in limited access to payment relief and unnecessary foreclosures. One-third of the nation’s home mortgages — all those not backed by the government — remain without any mandated relief.”
The NCLC also said the package should have provided aid to families without broadband, and alleged weak credit reporting provisions will have “long-term consequences.”