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Pou/Cryan/Oroho/Vitale: Financial Security for Consumers Act Clears Committee

Trenton – A broad bipartisan bill to protect consumers from compounding financial insecurities due to the COVID crisis passed the Senate Budget and Appropriations Committee today. The legislation was sponsored by the Chair of the Senate Commerce Committee Senator Nellie Pou, Senator Joe Cryan, Senator Steve Oroho and Senator Joseph Vitale.
The bill, S-2330, would prohibit debt collectors from seizing any governmental financial assistance provided in response to the COVID-19 pandemic, keep rating agencies from adversely affecting credit scores of persons impacted by the pandemic, ensure Medicaid covers the cost of COVID-19 treatment, allow more practitioners to perform testing and permanently extend the length of time before legal action can be taken to collect any medical debt – coronavirus-related or other – among other things.
“The entire country is facing deep financial instability, we have record high unemployment and people everywhere are struggling to stay healthy and keep food on the table,” said Senator Pou (D-Passaic). “When crisis strikes, it is the obligation of the government to ensure our residents are able to weather the storm in the safest possible way. That means keeping debt collectors from seizing their government assistance, giving them time to breathe while they pay their medical bills and making sure their financial future isn’t negatively impacted by circumstances that were out of their control.”
The only provision in this bill that is permanent and not contingent on the current State of Emergency is the provision prohibiting a medical creditor or debt collector from taking legal action for 180 days after the first bill is sent.
“The COVID crisis is having severe financial consequences for people throughout New Jersey that suddenly put hundreds of thousands of our neighbors onto a financial knife’s edge through no fault of their own,” said Senator Cryan (D-Union). “Many of them need time, support and understanding to pay their bills. What we are saying to the collection agencies is that people need a grace period to meet their financial responsibilities.”
Almost a third of working Americans currently have some kind of medical debt and about 54% of people with medical debt said they had defaulted, according to a new survey fielded by Salary Finance.
“Over one million New Jersey residents have lost their jobs during this economic crisis,” said Senator Oroho (R-Morris/Sussex/Warren). “These victims have been blind-sided, and with this bill, we can provide them with a measure of compassion and financial relief. This will help buy them some valuable time to get back to work and catch up on their bills once the economy gets back on its feet.”
“Medical debt is one of the leading causes of bankruptcy in the nation,” said Senator Vitale (D-Middlesex). “The measures in this bill will give our residents both the time and the transparency needed to help them avoid that kind of financial catastrophe and it is needed now more than ever.”
Another pillar of the bill would prevent the enforcement of judgements against consumers in collection lawsuits, with a few exceptions, during the state of emergency and 90 days thereafter.
The bill next heads to the full Senate for consideration.