WASHINGTON D.C. – Last night, the U.S. Senate unveiled a $1 trillion rescue package called the HEALS Act in response to the ongoing public health and economic crisis resulting from the COVID-19 pandemic. The bill falls far short of what is needed to support families and businesses in this crisis. It fails to include additional funding to state and local governments, extend the eviction moratorium and provide rental assistance, include provisions to protect consumers from predatory debt collection practices, provide relief for student loan borrowers, and add structural program fixes needed for the Paycheck Protection Program (PPP) to serve business owners of color. The legislation also continues to exclude millions of undocumented residents and mixed status families from accessing financial relief during the pandemic.
Center for Responsible Lending (CRL) Federal Advocacy Director and Senior Counsel Ashley Harrington released the following statement:
The bill is setting millions of families and businesses up for failure. It doesn’t address the current economic downturn, the looming rental housing crisis, or predatory debt collection practices for those falling behind on rent, credit card, and other payments. The bill lets the student loan payment suspension expire in September leaving no student debt relief for struggling borrowers, opting instead for a return to existing inadequate repayment structures. At a time when African Americans and other people of color are disproportionately impacted by the effects of the pandemic, extending the payment suspension and broad universal student debt cancellation is a must.
While several senators previously assured that new PPP provisions would help those hardest-hit small businesses, the current program updates in the legislation do not go far enough to ensure access for business owners of color. Despite numerous calls from consumer and civil rights organizations, including CRL, the bill fails to address critically important fixes to the PPP, such as allocating funds to Minority Serving Institutions and Community Development Financial Institutions that are committed to serving communities of color. It also does not set sufficient compensation for lenders for the smallest loans to ensure that there is not a disincentive for banks to serve the smallest businesses. Moreover, as the economic downturn continues, it becomes more evident that the smallest businesses, and those owned by people of color, don’t need another loan program, they need direct federal assistance in the form of grants. Active Black and Latino businesses have declined by 41% and 32%, respectively. We must not allow this to happen again.
As the coronavirus outbreak continues to have a devastating impact across the nation, we urge lawmakers and the Administration to move beyond this weak plan and to do so fast. If we’ve learned anything from the last recession it is that Black, Latino, and other families of color are disproportionately affected by major financial disruptions and need more relief and protections—not less. If we want to avoid more economic turmoil, we need to start safeguarding the interests of people and families.
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Press Contact: Vincenza Previte vincenza.previte@responsiblelending.org