Iowa Set to Remove Moratorium on Debt Collection Activities That Had Been Prohibited

In yet another sign that states are easing their restrictions and beginning to re-open after having been closed for more than two months, the governor of Iowa announced yesterday that she will not extend a moratorium that had been in place on evictions, foreclosures, and certain debt collection activities.

The announcement from Gov. Kim Reynolds was part of a broader plan to re-open other aspects of the state, including allowing casinos, amusement parks, outdoor playgrounds, and bowling allies, which will be allowed to re-open on June 1. The facilities will be allowed to operate at half capacity and must implement public health and social distancing guidelines, according to a published report.

“For our state, recovery means striking a balance between getting life and business as normal while continuing to manage virus activity. Our recovery is contingent upon our ability to protecting both the lives and livelihoods of Iowans,” Reynolds said in the report. “We can’t prioritize one over the other. We must prioritize both.”

Gov. Reynolds had instituted a moratorium on all garnishments in late April and ordered the ban to remain in place until May 27.

It is not clear if the end of the moratorium on garnishments includes protecting the stimulus money that individuals have received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act from judgments. Tom Miller, the Attorney General of Iowa, was part of a group of state AGs that called on Congress to protect the stimulus funds from being garnished.

A number of states have started removing some of the consumer protections that were put in place to help individuals during the COVID-19 crisis, including restrictions on debt collections.

[EDITOR’S NOTE: Join a panel of leading industry compliance experts on Wednesday, May 27 as they provide an update about how states are regulating debt collection during the pandemic. You can register by clicking here.]

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