Foohey, Jiménez & Odinet paper on what Congress should do to help consumers during the pandemic

Pamela Foohey, Dalié Jiménez, & Christopher K. Odinet have written CARES Act Gimmicks, How Not to Give People Money During a Pandemic and What to Do Instead, online at the Illinois Law Review.

Excerpt (footnotes omitted):

As a short term solution, money equivalents should have begun with an immediate nationwide eviction and foreclosure moratorium, accompanied by a debt collection, garnishment, and re-possession moratorium. Future legislation needs to include these measures to protect people’s housing situations and their savings. As stated by Massachusetts Attorney General, attempting to collect consumer debts right now and until the pandemic abates constitutes an unfair practice in violation of the Fair Debt Collection Practices Act, the Consumer Financial Protection Act, and many state consumer protection statutes.

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For future relief bills, we propose an expansion of the gimmick payments into something that will actually help people. First, these payments need to come on a monthly basis until a few months after the health crisis ends to give the economy time to recover. This may mean that American households receive payments for over a year. As a long-term alternative to moratoria, households should be given funds sufficient to cover their housing needs. This means giving people money to cover their mortgage payments and their rent. Such a solution is more effective than merely trying to halt evictions and foreclosures from a procedural standpoint. It keeps money flowing through the housing market and has the potential to prevent the need for the government to engage in aggressive interventions when it comes to holding up the mortgage finance sector.

0 thoughts on “Foohey, Jiménez & Odinet paper on what Congress should do to help consumers during the pandemic

  1. Bob Belovich says:

    Thank you for making this post and thanks to the authors for this timely and informative article. I encourage everyone reading this blog to read the whole article. Here are two more ideas that Congress should consider:
    1. Reauthorize and redevelop the Postal Bank. Bills to do this are before both houses. The bank can provision a simple bank account for every person with a SSN. This will simplify, expedite and reduce the cost of distributing money from the U.S. Treasury to U.S. citizens.
    2. Distribute more money directly to small businesses, through the IRS. Nathan Tankus has outlined this approach here.

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