A Memo from Rep. Maxine Waters Suggests Stimulus Priorities, Ceasing Debt Collection

In response to the overall economic uncertainty in this, our time of quarantine, House Financial Services Chairwoman Maxine Waters published a set of proposals— "proposals" is a key word here—on Wednesday evening, 18 March, for the next fiscal stimulus bill that Congress plans to take up to soften the huge damage the coronavirus is inflicting on the economy.

Waters is suggesting direct cash payments—larger and longer lasting than in other proposals—and suspension of nearly all consumer and small business debt payments, supported by reimbursements to creditors through the Federal Reserve.

(An excellent rundown of the various proposals being suggested is over at Roll Call: In memo, Rep. Maxine Waters lists stimulus priorities, ignoring industries.)

Three measures suggested by Rep. Waters, with the potential to seriously disrupt the credit and collections industry, are:

1. Suspend All Consumer and Small Business Credit Payments (mortgages, car notes, student loans, credit cards, small business loans, personal loans, etc.)

2. Suspend All Negative Consumer Credit Reporting During the Pandemic.

3. Prohibit Debt collection, Repossession, and Garnishment of Wages During the Pandemic. 

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insideARM's Perspective

Rep. Waters's proposal hasn't been embraced by everyone. Many are still (knock on wood) at the moment employed, and receiving a paycheck, so there are questions about the soundness of sending everyone in the United States a $2,000 check throughout the crisis. However, if debt collection ceases entirely for the duration of the pandemic, that's an entirely new flood of unemployed and financially vulnerable people.

This is a weird time. We're not telling you something you aren't already thinking/knowing/consumed with every day. If all you can do is the least amount of the Best You Can, you're doing enough. And we'll follow these various proposals as they start to circulate, like this one from U.S. Senators Brian Schatz (D-Hawai‘i) and Sherrod Brown (D-Ohio).