U.S. Rep. Marie Newman introduced legislation last week to prevent “predatory” debt collectors from accessing funding through the federal Paycheck Protection Program, which was set up to help businesses struggling during the COVID-19 pandemic.
The Ceasing Underserved Relief Benefits for Debt Collectors Act would prevent debt collectors that have committed violations of the Fair Debt Collection Practices Act from accessing PPP loans, according to a news release.
Newman, D-La Grange, introduced the bill with Rep. Suzanne Bonamici, an Oregon Democrat.
Newman said such debt collectors have “violated consumers’ rights” and have received millions of dollars in forgivable PPP loans.
“Throughout this pandemic, we’ve seen how predatory debt collectors and lenders have taken advantage of this economic crisis by collecting PPP loans that are intended for America’s small businesses, who need the relief and support the most,” Newman said in the release.
She said the bill can help business owners and consumers by making sure PPP dollars go to local entrepreneurs instead of “unscrupulous collection agencies.”
The legislation has support from eight House co-sponsors, including Rep. Jesus “Chuy” Garcia, D-Chicago.