With millions unemployed, many Americans cannot make timely payments

American credit consumers need assistance, relief

GLEN ROCK, NJ - On June 2, 2020, U.S. Congressman Josh Gottheimer (NJ-5), a member of the House Financial Services Committee, requested that the nation’s largest credit card issuers present detailed plans for emergency assistance programs for customers who may face immediate hardship in making timely payments on their credit accounts due to the ongoing pandemic and global economic crisis. 

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“Many borrowers, at no fault of their own, may face immediate hardship in making timely payments of their debt obligations, including revolving credit accounts. Fees, interest rate payments, and penalties may be levied on these borrowers, further punishing them during the crisis and hampering their ability to pay for necessities and catch up on missed payments,” Congressman Josh Gottheimer (NJ-5) wrote in a letter today to the CEOs of American Express, Bank of America, Capital One, Citibank, Discover, JPMorgan Chase, Synchrony Financial, U.S. Bank, and Wells Fargo. “I acknowledge that some of the institutions addressed in this letter have already made announcements and notified their customers that they will be working to assist them during these trying times.” 

Gottheimer continued, “To help me better understand your efforts and guide further legislation, please describe, with suitable detail, emergency assistance programs that your institution has put in place in response to the pandemic and to what extent your institutions are engaging with your clients and customers with programs.”

More than 40 million Americans have filed for unemployment over the past ten weeks, with a projected unemployment rate nearing 20 percent, according to the most recent reporting from the U.S. Department of Labor.

Millions more Americans are still uncounted, working their way through state-level unemployment offices, or are at heightened risk of losing their employment as the crisis continues, even as Congress invests in new programs to help mitigate this ongoing disaster.

Gottheimer has asked the credit card issuers to provide information regarding:

  • Whether the institution has suspended collecting interest, fees, or penalties; 
  • Whether credit card forbearance is being offered and, if so, under what terms; 
  • Whether available credit limits have been increased or reduced for cardholders; and
  • What actions have been taken to prevent adverse credit reporting impacts for individuals, including whether consumers are able to utilize disaster codes related to the pandemic.

A copy of the letter is available HERE, the text of which is provided below.

June 2, 2020

 

Stephen Squeri, CEO

American Express

200 Vesey Street

New York, NY 10285

 

Brian Moynihan, CEO

Bank of America

100 North Tryon Street

Charlotte, NC 28255

 

Richard Fairbank, CEO

Capital One

1680 Capital One Drive

McLean, VA 22102

 

Mary McNiff, CEO

Citibank

388 Greenwich Street

New York, NY 10013

 

Roger C. Hochschild, CEO

Discover

2500 Lake Cook Rd

Riverwoods, IL 60015

 

Jamie Dimon, CEO

JPMorgan Chase

383 Madison Avenue

New York, NY 10179

 

Margaret Keane, CEO

Synchrony Financial

777 Long Ridge Road 

Stamford, CT 06902

 

Andrew Cecere, CEO

U.S. Bank

800 Nicollet Mall

Minneapolis, MN 55402

 

Charles Scharf, CEO

Wells Fargo

420 Montgomery Street

San Francisco, CA 9410 

 

To Whom It May Concern: 

We are in the midst of an unprecedented global economic crisis caused by the novel Coronavirus (COVID-19) pandemic. According to the Department of Labor’s latest report, more than 40 million Americans have filed for unemployment over the past ten weeks, with a projected unemployment rate nearing 20 percent. Millions more are still uncounted, working their way through state-level unemployment offices, or are at heightened risk of losing their employment as the crisis continues, even as Congress authorizes billions of dollars into new programs to help mitigate this ongoing disaster.

As a result of the necessary social distancing and closing of non-essential businesses to protect public health, many borrowers, at no fault of their own, may face immediate hardship in making timely payments of their debt obligations, including revolving credit accounts. Fees, interest rate payments, and penalties may be levied on these borrowers, further punishing them during the crisis and hampering their ability to pay for necessities and catch up on missed payments.

I acknowledge that some of the institutions addressed in this letter have already made announcements and notified their customers that they will be working to assist them during these trying times. To help me better understand your efforts and guide further legislation, please describe, with suitable detail, emergency assistance programs that your institution has put in place in response to the pandemic and to what extent your institutions are engaging with your clients and customers with programs. Please include:

1. Whether your institution has suspended collecting interest, fees, or penalties; 

2. Whether credit card forbearance is being offered and, if so, under what terms; 

3. Whether available credit limits have been increased or reduced for cardholders; 

4. What actions have been taken to prevent adverse credit reporting impacts for individuals, including whether consumers are able to utilize disaster codes related to the pandemic; 

5. Anything else you believe to be relevant.

We look forward to your response on this important matter and urge you to utilize all of the tools available to continue to assist our communities. Please provide a written response to the information requested by June 16th, 2020. Thank you.

 

Sincerely,

 

Josh Gottheimer 

MEMBER OF CONGRESS

 

CC: The American Bankers Association