Forbes has published an article, Stimulus Proposal: $10,000 In Credit Card Interest Relief During Coronavirus Pandemic, about suggested legislation that Professor Jeff Sovern proposed along with Hofstra Law School professor Norman I. Silber to assist consumers during the pandemic. As stated in Forbes, the proposal would:
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- Allow banks to charge the government directly for 70 percent of interest charges on consumer credit cards; with the remaining 30 percent being charged to consumers, who could defer their portion until after the crisis is over;
- Cap the interest rates on credit card charges that are being subsidized by the government;
- Cap the benefit for each consumer at a certain amount – Silber and Sovern suggest $10,000;
- Condition payment by the government on banks agreeing to defer monthly credit card payments due from consumer cardholders for the length of the coronavirus catastrophe and forgiving prior minimum payment defaults;
- Provide for lenient consumer repayment terms thereafter; and
- Prohibit lenders who participate in the program from increasing interest rates, reducing consumer borrowing limits, or raising interest rates after the pandemic is over on charges that were incurred during the crisis.
In addition, Marketwatch quoted Professor Sovern in What we are confronting now is really unprecedented.’ Coronavirus-related lawsuits are about to flood the courts:
Consumer cases may turn on the fine print in a company’s terms of service, said Jeff Sovern, who teaches consumer protection law at St. John’s University School of Law.
Some businesses may have put language in their contract to guard against refunds during a pandemic, and customers — who rarely read the terms and conditions anyway — may not have noticed it, he said.
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In all consumer cases, businesses face a court of law, but also the court of popular opinion, Sovern noted.
A business that denies a refund might lose a customer for the rest of the customer’s life. Not to mention the customer’s family, friends, and in these days of social media, perhaps a lot of other folks too.” A similar dynamic could be at play for schools, he added. “Colleges, for example, want graduates to contribute and so might want to give a refund on the theory that denying the refund would be penny wise and pound foolish.”