As we approach the two-year anniversary of the passage of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the scope and costs of fraud in connection with its relief programs continues to mount. To date, the Department of Justice has brought criminal charges against over 1,000 defendants with alleged losses exceeding $1.1 billion; seized over $1 billion in Economic Injury Disaster Loan proceeds; and initiated over 240 civil investigations into more than 1,800 individuals and entities for alleged misconduct in connection with pandemic relief loans totaling more than $6 billion.… Continue Reading
During D.C.’s declared State of Public Health Emergency, several financial protections have been put in place, including some that severely limit, among other things, collection activities relating to consumer contracts, repossession, and legal actions on accounts. On September 1, Mayor Muriel Bowser signed the most recent pair of emergency and temporary legislation to land on her desk, B24-0347 and B24-0348. … Continue Reading
Without elaborating on its authority for doing so, the Department of Education recently announced the extension, through January 31, 2021, of certain pandemic-related benefits for federal student loan borrowers.
In particular, the administrative forbearance period, the 0% interest rate (pause in interest accrual), and the suspension of administrative wage garnishment and other collection activity will all remain in effect. … Continue Reading
On July 30, 2020, the House Financial Services Committee will hold a hearing entitled, “Protecting Consumers During the Pandemic? An Examination of the Consumer Financial Protection Bureau.”
The hearing will convene in a “hybrid” format, which allows Committee members to participate remotely or from the hearing room.
To the dismay of consumers, banks, creditors, and debt collectors alike, there currently is uncertainty as to whether CARES Act stimulus payments to individuals and Paycheck Protection Program loan proceeds can be garnished by private creditors. Ballard Spahr attorneys John Culhane and Lori Sommerfield have published an article, “Garnishment Must Be Clarified in Pandemic Relief Laws,” that discusses the relevant federal and state law considerations. … Continue Reading