Major Consumer Protections Announced in Response to COVID-19
This article, which will be updated as developments warrant, seeks to list the actions federal and state agencies as well as businesses are taking to aid consumers in light of the COVID-19 epidemic. These actions include suspensions on foreclosures, evictions, and terminations on telecommunications and utility service, elimination of interest and forbearance on student loan payments, and more. The article will also consider the impact of government-ordered closure or restrictions on court hearings and on non-essential businesses.
This article is limited to actions and orders that have been officially announced as final decisions. For information about actions that have been proposed by NCLC, other organizations, or Congress, see NCLC’s web page on COVID-19 & Consumer Protections.
Because of the rapidly changing reactions to the current epidemic, this list cannot be complete, but every effort has been made to be as up to date as possible. Readers are encouraged to email publications@nclc.org with additional protections that have been enacted in their state, county, or municipality.
NCLC during this emergency is making available to the public for free the digital version of NCLC’s most popular
publication, Surviving Debt (2020). Surviving Debt is geared for consumers, counselors, paralegals, and attorneys new to consumer law. The 288-page book explains steps that families in financial distress can take concerning foreclosures, repossessions, utility terminations, landlord evictions, debt collection, medical debt, student loans, credit reporting, credit cards, criminal justice, debt, and a number of other topics of special current interest.
NCLC is also providing deep discounts on our consumer law treatises, which are all available in print and digital formats. The first chapter of each treatise’s digital version is available free to the public.
Federal Suspension of Foreclosures
Importance of Knowing the Mortgage Loan’s Investor: There is no uniform federal policy concerning COVID-19 and
suspension of mortgage loan foreclosures. The response varies by loan investor. Many outstanding mortgage loans are subject to rules imposed by these five major investors: Fannie Mae, Freddie Mac, Federal Housing Administration (FHA), Veterans Affairs (VA), and the U.S. Department of Agriculture’s Rural Home Service (RHS).
The following are tools to quickly determine which investor’s foreclosure suspension rules apply to a particular homeowner’s mortgage loan:
• Fannie Mae and Freddie Mac have easy loan look-up websites to determine if they own a mortgage. See
https://ww3.freddiemac.com/loanlookup/ [4] and https://www.knowyouroptions.com/loanlookup# [5].
• To determine if a loan is FHA-insured, look for an FHA case number on the mortgage document, specific language inthe mortgage and note forms, or through the payment of an FHA premium on the mortgage statement. In some cases, unfortunately, loans may have been stripped of their FHA-insured status; call HUD’s National Servicing Center at 877-622-8525 if there are questions.
• A VA-guaranteed loan also has specific language in the note and mortgage identifying it as a VA loan, and there are
fees paid to the VA noted in closing documents.
• While a borrower with a mortgage directly extended by the RHS will be very familiar with the agency, homeowners
with privately serviced RHS-guaranteed loans often do not know the loan’s status. If an RHS-guaranteed loan is
suspected, directly ask the servicer to review the homeowners’ closing documents.
Links to Foreclosure Moratoriums and Suspensions by the Major Mortgage Investors:
• FHA — https://www.hud.gov/sites/dfiles/OCHCO/documents/20-04hsgml.pdf
• VA — https://www.benefits.va.gov/HOMELOANS/documents/circulars/26_20_8.pdf
• USDA Direct – https://www.rd.usda.gov/sites/default/files/USDA_SA_COVID19_SFHContinuity03202020.pdf [
• USDA Guaranteed —
https://www.rd.usda.gov/sites/default/files/USDA_RD_SA_Foreclosure_and_Eviction_Relief_COVID19_NationalEmergency.pdf
• Fannie Mae — https://singlefamily.fanniemae.com/media/22261/display
• Freddie Mac — https://guide.freddiemac.com/app/guide/bulletin/2020-4
Federal Banking Agency Guidance on Mortgage Servicing and Loan Modifications
Federal Reserve, FDIC, NCUA, OCC, CFPB, and the Conference of State Bank Supervisors have issued an Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (March 22, 2020) .
State Actions Limiting Foreclosures and Evictions
Alaska has halted all court eviction hearings.
California (nonjudicial foreclosure), Executive Order N-28-20 from Governor (March 16, 2020, effective to March 31, 2020): Suspends state preemption of local government regulation of evictions, including post-foreclosure evictions. Localities may restrict evictions in cases where nonpayment was caused by income reduction or increased household expenses.
Connecticut (judicial foreclosure), Statement from Chief Court Administrator [15] (March 18, 2020): All foreclosure sales previously scheduled to occur in April or May 2020 rescheduled to June 6, 2020. The judgment in any foreclosure action in which the court set a redemption period to expire during April or May 2020 is amended to set the expiration date for June 2, 2020. The execution of ejectment judgments is stayed through March 27, 2020. Civil trials, trial management conferences, pretrial and status conferences, and mediations cancelled until further notice.
Indiana (judicial foreclosure), Governor’s Executive Order (March 19, 2020): Public health emergency declared to
April 5, 2020. No residential eviction proceedings or foreclosure actions to be initiated during the declared public health emergency.
Iowa (judicial foreclosures), Governor’s Proclamation of a Disaster Emergency: (March 22, 2020) Temporarily
suspends the commencement of foreclosure proceedings, or the prosecution of ongoing foreclosure proceedings, on residential, commercial, and agricultural real property located in the state, at least through April 16, 2020. The suspension also covers land contract forfeitures and removal actions for property tax deed foreclosures.
Maine (judicial foreclosure), Emergency Order and Notice Maine Supreme Court (March. 18, 2020, effective to May
1, 2020): No proceedings will be scheduled or heard for foreclosure and eviction cases, and actions to recover personal property.
Maine (judicial foreclosure), Emergency Order Maine Superior and District Court (March 17, 2020): Until further order of court 49 days added to unexpired deadline established by court order or court rule, but does not extend statutory deadlines or limitations.
Maryland (judicial authorization for nonjudicial foreclosure), Administrative Order Maryland Court of Appeals
suspension of evictions and foreclosures during Covid-19 emergency (March 18, 2020): Residential foreclosures and
foreclosure of right to redeem after tax sale pending in circuit courts stayed effective immediately. Same for pending and scheduled evictions. New residential foreclosures and foreclosures of right to redeem after tax sales “shall be stayed upon filing.” Order to be revised “as circumstances warrant.”
Michigan (nonjudicial foreclosure), Governor’s Executive Order 2020-19 (March 20, 2020, effective April 17, 2020): Bars execution of eviction process against tenants, vendees under executory contracts (installment land sale contracts) and manufactured home owners. Does not specifically reference post-mortgage foreclosure evictions.
Michigan (nonjudicial foreclosure), Governor’s Executive Order 2020-14 (March 18, 2020): Temporarily suspends tax sale redemption deadline from March 31, 2020 until the later of (a) May 29, 2020 or (b) 30 days after the termination of the state of emergency.
North Carolina (judicial foreclosure), Order of Supreme Court (March 19, 2020): Extends deadlines for filing
pleadings, motions, notices, other documents and performing required “acts” in civil proceedings, including “special
proceedings” (foreclosure proceedings) until April 17, 2020. Effect is to delay to April 17, 2020 the completion of foreclosure sales not finalized as of March 16, 2020.
South Carolina (judicial foreclosure): Order of Supreme Court of South Carolina, Re: Statewide Evictions and
Foreclosures (March 18, 2020): Orders statewide moratorium on foreclosure hearings, foreclosure sales, writs of
ejectment, all matters relating to foreclosures until further order of Chief Justice.
Washington, D.C.: Judiciary orders suspends evictions of all tenants and foreclosed homeowners from March 14 to
May 15; continued hearings on Small Claims, Debt Collection, Mortgage Foreclosure, Housing Court.
Department of Education Action on Student Loans Department of Education Press Release (March 20, 2020): All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days. In addition, each of these borrowers will have the option to suspend their payments for at least two months to allow them greater flexibility during the national emergency. This will allow borrowers to temporarily stop their payments without worrying about accruing interest. For more detail about the suspension of interest charges and payment forbearance, see this article from NCLC’s Student Loan Borrower Assistance site.
Department of Education, Coronavirus and Forbearance Info for Students, Borrowers, and Parents: includes more
detail on the suspension of interest accrual and loan payments, with additional Q & A on other topics relevant to students in school, student loan borrowers, and their parents.
State Actions Regarding Utility Service and Telecommunications
Arrearage Management: Eversource (a large Massachusetts utility) has agreed to change their arrearage management rules to help customers unable to make their monthly arrearage management plan (AMP) payments. Eversource will not remove a customer from the AMP, even if the customer misses payments during the emergency. At the end of the emergency, Eversource will work out a new monthly payment amount and schedule so the customer can continue to receive AMP benefits (monthly write-downs of the arrearage). For more details, email charak@nclc.org.
Suspension of Telecomm Terminations: The FCC has obtained promises from over 1000 telecommunication companies to comply with the following guidelines for at least the next 60 days: not terminate service if the termination is based on an inability to pay caused by the COVID-19 epidemic; waive any late fees where late payment was caused by the epidemic; and open its Wi-Fi hotspots to the public.
State Utility Commission Suspension of Utility Disconnections: Almost half the states have imposed a moratorium on utility terminations. The list is growing, but as of now government bodies have ordered disconnection suspensions statewide in:
• California;
• Connecticut;
• District of Columbia;
• Illinois;
• Indiana;
• Iowa;
• Kansas;
• Kentucky;
• Louisiana;
• Maine;
• Maryland;
• Massachusetts;
• Mississippi;
• New Hampshire;
• New Jersey;
• New York;
• North Carolina;
• Ohio;
• Pennsylvania;
• South Carolina;
• Vermont;
• Virginia;
• West Virginia (regulators are “urging” utilities to suspend disconnections); and
• Wisconsin.
Important Note re Municipal Utilities and Rural Electric Cooperatives: Whether the above utility termination suspension orders apply to municipal utilities and rural electric cooperatives depends on the state, who issued the order, that state’s emergency laws, and the wording of the proclamation order.
In a few states, the state’s billing and termination rules apply to municipals. In most states, however, municipal utilities are not covered by a PUC order. They would be covered if the order is issued by a governor, and that state’s laws give the governor broad enough power to cover not just the regulated companies but virtually any business, and the wording of the order/proclamation makes it clear that it applies to ALL utility providers. In addition, municipal utilities may abide by a state suspension order even if it is not legal binding on them, or may on their own decide to suspend terminations. For example, Anchorage Alaska Water and Wastewater Utility and Municipal Light & Power have declared a moratorium on all shutoffs.
Voluntary Company Suspension of Utility Terminations: Even when not required by the state commission, a number of utilities are suspending terminations, including but not limited to: Ameren, American Electric Power, Dominion Energy, Duke Energy, Evergy, FirstEnergy, Georgia Power, NV Energy, PECO, PG&E, Southern California Edison, and Xcel Energy. The trade association for many utility companies, Edison Electric Institute, announced that its members are suspending electricity disconnections for nonpayment nationwide.
More About Utility Suspensions: Some of the above mandated and voluntary suspensions of service apply to late fees as well, but others do not. Some utilities are voluntarily reconnecting customers and Wisconsin, for one, is requiring it for previously disconnected customers as long as utility companies can do so in a safe manner. Some of the mandated suspensions of disconnections are short-lived, such as only through the end of March, while others are open-ended. Some state moratoriums also apply to telecommunication services and some states have issued moratoriums specifically preventing termination of telecommunication or cable services. See, e.g. , Maryland.
Door-to-Door Sales by Competitive Suppliers:
• Pennsylvania Public Utility Commission’s Moratorium re: Supplier Door-to-Door and In-Person Marketing
Proclamation of Disaster Emergency-COVID-19, limits in-person sale of competitive electric service. Other emergency proclamations may limit person-to-person sales contacts as well.
• Illinois Commerce Commission issued two emergency orders banning in-person marketing and sales of electric
and gas energy supply, including door-to-door marketing.
• Massachusetts Department of Public Utilities has issued a March 24 letter requesting that all Competitive
Suppliers and Licensed Competitive Supply Brokers cease door-to-door marketing activities until the Department
rescinds this request or the state of emergency in the Commonwealth of Massachusetts is lifted, whichever comes first.
• Other emergency business closure proclamations may limit person-to-person sales contacts as well.
Price Gouging
Massachusetts Attorney General just issued an emergency regulation, amending 940 Code Mass. Regs. 3.18 to expand the prohibition against price gouging from covered petroleum products to now include “any goods or services necessary for the health, safety, or welfare of the public.”
Wisconsin, the Department of Financial Institutions has announced that payday and licensed lenders risk license
suspension or revocation for increasing interest rates, fees, or costs of borrowing in response to COVID-19.
To see other state restrictions on price gouging in an emergency, see NCLC’s Unfair and Deceptive Acts and Practices §§ 4.3.11 [39] and 8.5.1.5.
Collection of Civil and Criminal Debt Owed to the State, Other Debts
A state-by-state tracker for COVID-19 fines and fees suspensions is found at the Fines & Fees Justice Center, by scrolling down past their policy recommendations.
Fulton County, Georgia, Magistrate Court has suspended personal property foreclosures from March 14 to April 14, 2020.
Macon-Bibb County, Georgia, Civil and Magistrate Courts will not serve new garnishment orders. See
https://www.maconbibb.us/covid19/ guidance listed under the “Slowing the Spread of COVID-19” list in the drop-down entitled Sheriff’s Office of Civil & Magistrate Court.
Chicago, Illinois: The mayor has suspended payment plan defaults, late penalties, referrals to collection firms for city debts from March 18 to April 30, 2020.
Kentucky: The governor has suspended state-enforced collection methods, including releasing bank and wage levies,
license and vehicle registration revocations, and providing a 3-month hold on payments for taxpayers and individuals if they call and report they cannot make installment payments due to COVID-19.
Louisiana: 12th Judicial District Court has suspended the requirement to make scheduled payments of fines, fees and
court costs until further notice.
Maine courts have vacated [47] all outstanding warrants for unpaid court fines and fees and for failure to appear for hearings.
Massachusetts has suspended collection of debt owed to the state at least until April 7, 2020.
Minnesota judiciary will stop sending out late penalty notices and assessing the late penalties for all citations; halt the
automated process by which a person’s license is suspended for failure to appear; and stop referring past-due payment cases to the Department of Revenue for collections.
Las Vegas, Nevada, Justice Court, effective March17 has ordered a stay of existing writs and requires any seized
property frozen as of the date of the order to be released back to the debtor.
New York’s attorney general on March 16 ordered state debt collection suspended for at least 30 days, state student and medical debt is automatically suspended, consumers with other state debts can apply for relief at.
New York: Some parts of the state have temporarily stopped processing new driver’s license suspensions and associated fees for failure to pay traffic tickets or for failure to appear at a traffic court hearing.
New York, Buffalo is suspending late fees and interest on parking, traffic and other city accounts (e.g., utilities).
New York, Brooklyn has adjourned all non-essential court dates (including payment dates) for either 60 or 90 days; no warrants or civil judgments will be issued for unpaid court debt in the meantime. District Attorney Eric Gonzalez also announced he won’t prosecute low level crimes.
Osage County, Oklahoma on March 16 placed a hold on most outstanding warrants.
Reading Pennsylvania announced several fines and fees reforms.
• Suspend new late penalties on citations.
• Extend deadlines for submitting citation protests.
• Grace period of fine payment from March 18-31, 2020.
• No barnacles or boots will be placed on cars from March 18-31, 2020.
• Discontinued the issuance of new parking tickets.
• Suspension of parking meter enforcement.
• RPA will allow residents to park their cars free of charge 24/7 for next 2 weeks.
Banking and Bank-Extended Consumer Credit
The federal regulators that oversee federal banks are encouraging banks to work with their customers to help them meet their financial needs, including waiving certain fees, increasing credit limits for some borrowers, and offering payment accommodations including modifying terms on current loans due to temporary financial hardship due to COVID-19. For more information, see materials by the Office of the Comptroller and the Federal Deposit Insurance Corporation.
New York Governor’s Executive Order No. 202.9 charges the New York State Department of Financial Services to
ensure that licensed or regulated entities grant consumers in the State of New York forbearance of loan payments for 90 days for any person or entity facing a financial hardship due to COVID-19. NYSDFS emergency regulations will modify or restrict ATM, overdraft and credit card late fees charged by licensed or regulated entities.
Bankruptcy Changes
U.S. Trustee Program Notice on Continuance of Section 341 Meetings (March 16, 2020): “Effective immediately, all
in-person chapter 7, 12, and 13 section 341 meetings scheduled through April 10, 2020, are hereby continued until a later date to be determined. Absent special circumstances, section 341 meetings may not proceed during this period except through telephonic or other alternative means not requiring personal appearance by debtors. Appropriate notice will be provided to parties in accordance with bankruptcy law and rules. Meetings already noticed as telephonic meetings may proceed as scheduled.”
U.S. Trustees Office re Audits: Effective immediately, the USTP is suspending its designation of new individual chapter 7 and chapter 13 cases subject to audit for an indefinite period.
Health Insurance
The Commonwealth Fund is keeping track of state actions related to private insurers’ coverage of COVID-19 critical
services.
Closures and Restrictions on Court Hearings and Non-Essential Businesses
The impact of court closures on judicial foreclosures, collection actions, and the like. Closure of courts to in-person hearings and limits on telephone/video hearings to essential matters may place a hold on judicial foreclosures, manufactured home replevin actions, collection lawsuits, and requests for post-judgment remedies. However, depending on their specific terms, these court closure orders and stays may not automatically stop the running of certain important deadlines, such as postforeclosure redemption periods.
Is a debt collector a non-essential business? When a state closes non-essential businesses, does this relate to debt collectors? This may depend on the specific wording of a governor’s order. Nevada explicitly defines collectors as a non-essential business, but West Virginia’s order provides that they are an essential business. Another issue is that debt collectors may be calling from out-of-state, and thus whether they should be closed may depend on a
closure order in their state of residence and not the state where the consumer resides. On the other hand, a state’s closure order may apply to out-of-state debt collectors who are licensed in the state that issued the closure order. Another question is whether debt collectors can communicate from their homes even if they cannot communicate from their usual location that may involve multiple personnel present. On the other hand, existing state law may limit locations from which collectors can initiate communications.
What about repossessions? Unclear is whether a vehicle repossession is in violation of a cease business order, and also whether the seizure in these conditions should be considered a breach of the peace, particularly if the repossession occurs while the debtor or others are present.