Legislative Update from the ARA

“I would encourage you: be informed – knowledge is power.” Matt Bevin

Mike Pepilnski and I continue to have phone conferences with our lobbyists with various staff members working for members of Congress. So far, the Senate Republicans have yet to field a response to the HEROES Act passed by the House. In that bill, there is language that would put a nationwide moratorium on auto repossessions, and would effectively ruin the futures for many in our industry.

This language appears in three different places in the bill that is up for discussion.

The three sections are:

Section 110203 banning repossession of vehicles as dwellings

Section 110402 banning repossessions as instrument to collect individual debt

Section 110601 banning repossessions as instrument to collect small business and nonprofit debt

National Law Review reported about the troublesome language. “…and the restrictions are pretty broad. Under HEROES during a ‘covered period,’ creditors and collectors cannot repossess or foreclose on any personal property (mortgages are dealt with separately) or garnish wages or other income. What’s more, folks can’t threaten to take any such action either.” The National Consumer Law Center’s attorney John Van Alst stated “The HEROES Act protects a family’s car, often their lifeline to work, groceries, testing and so much more, from repossession by prohibiting repossessions both in person and electronically, for at least the next four months.” Some of the language deals with non-judicial actions and would apply to repossessions via that terminology – lenders would be prohibited from any attempt to “enforce a security interest through repossession, limitation of use or foreclosure.” Those that have read the act and thought it only applied to cars that might be construed as “residences” are failing to take the entire act as a whole…and people like the National Law Review are reading it correctly, in context.

So far, the Senate has not been able to field an acceptable response and the Senate staffers we have spoken with have not sensed that these particular prohibitions will certainly make their way into the Senate bill for sure – but there may be pressure to compromise. In committee meetings, some Congressional members may try and force a compromise that will include this language and our job is to make sure Congress is made aware of the unintended consequences of throwing our industry under the bus in order to come up with a compromise bill. You can read about it every day on Fox TV or CNN. The pressure is on for the Senate to come up with a compromise to the House bill. Being in conversations with those shaping this compromise is key to what the Repo Alliance is doing now.

We have spoken with perhaps 10 or 12 Senate offices and continue to get a surprisingly good response regarding our concerns. We feel that they will circle back to our lobbyists for information and support when they want to push back against those provisions – if they are pressed to do so in the coming weeks in shaping their response to the House bill.

I’d like to make a couple of comments – the danger of this happening was very real, and had the Senate already accepted the House bill, we would’ve been in deep trouble. We have to make sure they don’t accept these provisions in the midst of a compromise. It may be an item on the table in committee meetings still, and for that, we need to be at the table in these discussions.

At the end of the day, if the language is left out and we are in the clear, those of us that have been involved will NOT say “It was dropped from the bill, and this was a waste of time and money.” What we WILL say is “Wow, that was close!”

Secondly, and perhaps as importantly, things are going to change. We are months away from possible huge changes in the political landscape. To have already been in discussions with both Republicans and Democrats, and having made members of Congress aware that there IS a voice from the repossession industry, this has already been a tremendously worthwhile effort, and perhaps even more-so after November. Many news sources are reporting that Republicans could lose the Senate in this election, and Democrats already control the House and may occupy the White House come January 2021. Regardless of your political leanings, this would mean that some of these over-reaching “consumer protection” measures will roll out unimpeded by pro-business Republicans and the CFPB could come roaring back to life. For all these reasons, to have a voice in Washington DC is key to our survival. Even after this COVID-19 legislation fades from view (if it does), the work in protecting our industry will be far from over.

Cordially,

J. Patrick Altes and Mike Peplinski

Legislative Liaisons for the Repo Alliance