House lawmaker calls for freezing consumer and business credit payments
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[March 19, 2020]
By Pete Schroeder
WASHINGTON (Reuters) - All payments on
mortgages, credit cards, small-business loans and other consumer debt
would be indefinitely suspended under a plan unveiled on Wednesday by a
senior Democratic House lawmaker in response to the coronavirus
The proposed plan from Representative Maxine Waters, who chairs the
House of Representatives Financial Services Committee, would also direct
the Federal Reserve or Treasury Department to create a credit facility
to cover the cost of those stalled payments to creditors.
"The circumstances we are facing are unprecedented and will require
creative approaches," she said in a statement.
Waters' plan is the latest in a series of proposals from members of
Congress and the White House as policymakers are scrambling to contain
the spread of the flu-like virus and the economic fallout accompanying
Her plan would also authorize the Fed, using money provided by Congress,
to give $2,000 per month to every U.S. adult and $1,000 for every child
until the pandemic eases. Her plan would also bar negative credit
reporting, debt collection and repossession of goods during the
pandemic. She would also institute a temporary ban on evictions and
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Her plan would also allow for Americans to forgo up to $10,000 in
student loan debt, and create a reinsurance program for future
pandemics similar to one that currently exists to protect losses
stemming from terrorist attacks.
As chairwoman of the banking panel, Waters has considerable sway
over financial policy. But there are multiple policy plans emerging
from lawmakers and the White House, making it unclear how much of
her plan could gain traction.
(Reporting by Pete Schroeder; Editing by Peter Cooney)
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