House, Senate Introduce Bills to Protect Furloughed Gov’t Employees From Collection Activities

Bills have been introduced in both the Senate and the House of Representatives aimed at protecting furloughed federal government employees from being evicted, having their property repossessed, or being subject to debt collection activities while they are not being paid.

The Senate bill — S.72 — was introduced last week by Sen. Brian Schatz [D-Hawaii]. The House bill — H.R.588 — was introduced yesterday by Rep. Derek Kilmer [D-Wash.]. Both bills would suspend certain civil actions for as long as government employees are working without pay. The bills are modeled after the Servicemembers Civil Relief Act (SCRA), which protects active duty members of the military from certain civil actions — such as having their homes foreclosed upon or automobiles repossessed — while on active duty, unless the creditor has obtained a court order.

The House bill has been referred to a number of committees, including the House Financial Services Committee. The Senate bill has been referred to the Senate Finance Committee for consideration.

“Folks who work for TSA, the Bureau of Prisons, the EPA, and other federal agencies are all going without pay through no fault of their own – the least we can do is make sure they don’t lose their homes or their insurance because Washington can’t get its act together,” said Rep. Sean Patrick Maloney [D-N.Y.], one of the co-sponsors of the House bill. “This bill will provide the protections our federal workers need during this difficult time and we’ll be working to pass it into law.”

Additionally, more companies and creditors are announcing plans to extend forbearance plans for government employees. PSE&G, a utility in the Northeast, for example, has announced a 60-day grace period that is being made available to certain customers, including “financial hardship beyond their control,” according to a published report.

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