The $ 670 billion paycheck safety program offers forgivable loans of as much as $ 10 million to small companies. From the beginning, disputes have arisen over whether or not sure firms must be eligible for this cash.
Many debt assortment companies have thrived throughout the pandemic, and client advocates are questioning whether or not these companies’ actions must be sponsored by the federal authorities, particularly throughout an financial downturn.
Based on a Washington Put up Evaluation earlier this yr, greater than 1,700 assortment businesses and associated companies borrowed from this system, totaling greater than $ 520 million in loans. Among the recipients have already been sanctioned for harassment or different abusive techniques.
“It’s unacceptable that predatory debt collectors might have taken benefit of this program, diverting funds from small companies that desperately need assistance throughout this financial disaster,” mentioned Bonamici, who was previously employed as a debt safety lawyer. shoppers at Federal Commerce. Fee.
Whereas many of the program’s cash has already been distributed – and is due to this fact exempt from any such laws – purposes for the federal aid program shall be accepted till the tip of Could, and officers not too long ago mentioned this system had about $ 79 billion to distribute. .
In response, nevertheless, a commerce group representing debt collectors has warned that debt collectors play an important function within the U.S. economic system, make use of 1000’s of individuals, and that uncollected money owed enhance client costs.
“The gathering course of performs an important function in a wholesome credit score ecosystem,” Leah Dempsey, vice chairman and senior federal advocacy counsel at ACA Worldwide, mentioned in a press release. “As such, discriminating in opposition to the debt assortment trade within the PPP course of would hurt shoppers, the economic system, collectors, and 1000’s of American staff throughout the nation.”