Charlene CrowellColumnists

$3 Trillion HEROES Act Promises More COVID-19 Relief for Consumers and Businesses

Will the U.S. Senate Act Swiftly on New Legislative Plan?

As the nation’s Centers for Disease Control and Prevention (CDC) tracks the spread of COVID-19, by mid-May, at least 1.5 million infections and over 93,000 deaths occurred. This data includes all 50 states, the District of Columbia and the territories of Guam, the Northern Mariana Islands, Puerto Rico and the U.S Virgin Islands.

At the same time, the Bureau of Labor’s unemployment data for the month of April showed that over 36 million people have filed for unemployment and affected all major employment groups. One bit of data also showed that Black America’s unemployment rate of 16.7% was surpassed by that of Latinos at 18.9%. Similar data for others showed that of Asian-Americans to be 14.5% and whites at 14.2%.

According to a survey published on May 14 by the Federal Reserve Board on the COVID-19 pandemic, as of early April:

– Among adults who lost a job or had their hours reduced, 70 percent reported that their income declined.

– More than 9 in 10 who lost a job or were told not to work expect to return to the same job.

– Sixty-seven percent of workers who never attended college and 60 percent who completed some college or an associate degree worked entirely outside of their homes.

In sum, the economic effects of a raging pandemic are affecting people of all races, backgrounds and educational levels. And an unfortunate pattern continues: families hardest hit by the Great Recession are again disproportionately affected.

Speaking on behalf of the 12 million-strong American Federation of Labor and the Congress of Industrial Organizations (AFL-CIO), Richard L. Trumka, its president, sent a letter to Congress on May 15 that spoke to the real-life concerns of working people.

“Don’t tell us we should wait a little longer for the unemployment benefits we earned or the health insurance we deserve,” Trumka wrote. “We have waited long enough.

“Don’t tell us we should sacrifice our pensions,” he continued. ”Don’t tell us states should go bankrupt or that federal relief is a blue state bailout. We are all vulnerable, and this nation deserves better.”

Later that day, a new $3 trillion legislative initiative known as the HEROES Act, passed the House of Representatives on May 15 by a 208-199 vote and awaits review and action by the Senate.

But how swiftly will the upper chamber move on the new COVID-19 plan? And how many Senate amendments will strike at key provisions passed by the House?

Introduced on May 12 by New York Rep. Nita Lowey, the HEROES Act had 11 co-sponsors representing the additional states of Arizona, California, Massachusetts, New Jersey and Virginia and provides a broad assortment of new and renewed assistance targeted to essential workers, first responders, minority-owned and other small businesses, students, the homeless and others.

For example, housing concerns for renters, homeowners and the homeless in the HEROES Act would extend the CARES Act’s previous moratorium on evictions and foreclosures. But it would also provide new housing assistance with $100 billion in emergency rental assistance, $75 billion for homeowner assistance, $11.5 billion in homeless grants and expand Section 8 vouchers with a $1 billion revenue infusion. The bill also includes $500 million for Section 202 Housing for the Elderly, $100 million for housing counseling and $14 million for fair housing activities.

Similarly, debt collections against either minority-owned and other small businesses or consumers would be suspended during the pandemic. Consumers would not be subjected to negative credit reporting and debt collection, while the Federal Reserve would be required to make low-cost, deferrable loans to small businesses, nonprofits and public universities. Nonprofits serving low-income communities could be eligible for these loans to be forgiven.

Before the early evening House vote, multiple stakeholder groups spoke out in support of the bill.

“The HEROES Act focuses on real people because consumers drive our economy and we can’t just leave American families to trickle-down help from businesses,” said Lauren Saunders, associate director of the National Consumer Law Center (NCLC).

For Abby Shafroth, an NCLC attorney, criminal-justice issues were a particularly key part of the legislation.

“The last thing that we need right now is to have people in unsafe prisons and jails for the crime of being poor,” Shafroth said. “By prohibiting the government from incarcerating people for nonpayment of debts, restricting the use of money bail to detain poor people who have not been convicted of a crime, and incentivizing state and local governments to suspend imposition and collection of fines and fees during the crisis, the HEROES Act protects people from being imprisoned or trapped in the broken criminal justice system merely because they are unable to afford a debt or a fine.”

Before House voting began and speaking on the chamber’s floor, Rep. Maxine Waters, chair of the House Financial Services Committee, summarized the feelings of many citizens and lawmakers alike.

“We hear members on both sides of the aisle talking about how much they love America, how much they love their constituents,” Waters said. “Put up or shut up. Now is the time to do it.”

That advice needs to be heard in the Senate, where the bill’s outcome is unclear. Although the House inserted provisions to address wide-ranging concerns, there is no guarantee that the Senate will act promptly or as generously.

Even so, the Center for Responsible Lending (CRL) remains hopeful that the act will not only be preserved, but strengthened.

“The HEROES Act shows strong promise and addresses important needs of low-wealth families impacted by COVID-19, such as mortgage and forbearance relief, extended unemployment benefits, food assistance, and protections against harmful debt collection activities and negative credit reporting,” said Ashley Harrington, CRL’s federal advocacy director and senior counsel.

“However as amended, the bill curtails its original, inclusive plan to cancel $10,000 of debt for all federal and private student loan borrowers,” Harrington said. “These cancellation provisions are unmanageable and inequitable — they won’t help many of the student loan borrowers due to its structural flaws that exclude millions from getting relief.”

Harrington also noted how the HEROES Act fails to include “important safeguards against high-cost lending and abusive overdraft fees” during the crisis.

“The Senate should act swiftly to include these additional consumer protections and ensure that all those with student debt are able to benefit from debt cancellation,” she said.

Charlene Crowell is a senior fellow with the Center for Responsible Lending. She can be reached at charlene.crowell@responsiblelending.org.

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