August 11, 2020
Today Consumer Action for a Strong Economy (CASE) sent a letter to Capitol Hill urging lawmakers to abandon language currently contained in the HEROES Act that creates an overly broad loophole for utility disconnect moratoriums, a provision that could have a devastating impact on the financial well being of consumers of middle and lower incomes struggling to stay afloat through the economic downturn. The legislative language in the Act states, “No debt collector may during a covered period…disconnect or terminate service from a utility service, including electricity, natural gas, telecommunications or broadband, water, or sewer for nonpayment.”
Among the numerous problems with this provision, the letter notes, “While well-intended, the proposed solution of allowing consumers a safe harbor for non-payment of utilities is truly misguided, overly broad, duplicative, and will only entrap low income consumers and families in a further lifecycle of debt.”
Noting that the moratorium will continue beyond the time period when the National Emergency Declaration is lifted, CASE further points out, “With no timeline in place, bills would pile up for consumers, only putting them deeper and deeper in debt. This provision is the equivalent of financial quicksand, sinking consumers into larger and larger financial debt with no real program assistance or structure of repayment.”
Even more troubling is that the moratorium is not means tested, the result of which is that households not facing a Covid-related financial hardship will have the same forbearance options as families truly in need, the letter points out: “Among the additional concerns of the provision of the HEROES Act is that it is overly broad, as it applies to even to the wealthiest Americans. This language notably fails to target this relief to Americans who are impacted most by the pandemic and those who are truly unable to pay their bills as a result; allowing forgoing payments to anyone, at any time, for any reason. Put simply, this broad legislative stroke is not aimed atconsumers that in fact need help the most.”
A full copy of the letter can be found here.
