Los Angeles Council Approves Proposal Calling for Halt on Collections, Labeling Agencies as Non-Essential Businesses

Not to be outdone by the metropolis on the other side of the country, the city council of Los Angeles has unanimously passed a proposal that calls for collection agencies to be labeled as non-essential businesses and for a moratorium on all collection activities within the city for the duration of the coronavirus pandemic.

The mayor of Los Angeles, Eric Garcetti, has asked the city’s attorney if the city has the jurisdiction to order a halt on all collection activities within its boundaries. If it does have the jurisdiction to do so, Garcetti said he would be “happy to not only embrace that, but to lead the nation.”

The proposal was made by Monica Rodriguez, a city councillor, during a council meeting that was held remotely yesterday.

“Families are already struggling and experiencing economic trauma — we don’t need the repo man showing up on doorsteps and taking away assets,” Rodriguez said in a statement, according to a published report.

During the meeting, Shawn Suhr, the president of the California Association of Collectors, urged the council not to declare collection agencies as non-essential businesses. Individuals need to be able to get in touch with agencies to dispute or receive information about debts and to make payments, if the individuals are able to do so, the association told the council.

The vice president of another agency phoned into the council meeting to discuss the important work that collection agencies do to support their clients, including hospitals and healthcare facilities, many of which are facing severe financial shortfalls as they deal with the COVID-19 crisis.

The proposal was hailed by consumer advocacy groups across California.

“There is no activity more counterproductive right now than pushing people who are already on the financial precipice over the edge,” said Ted Mermin, director of the California Low-Income Consumer Coalition, according to the report.“This is, by and large, not the mom-and-pop grocery store down the street. These are very large companies that hold most of the debt that’s being pursued.”

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