Jones Reintroduces Bill to End Unsolicited ‘Direct Check’ Loans


US Senator Doug Jones, D-Alabama, and a Republican colleague on the Senate Banking Committee called on Wednesday for a ban on “unsolicited predatory lending” during the COVID-19 crisis.

Jones and Sen. Tom Cotton, R-Arkansas, reintroduced their unsolicited loan law, which would end the the practice of sending high interest loans to the public in the form of “direct” checks.

“As you contemplate the next pandemic relief program, we write to highlight financial scams where Americans are being sent unsolicited “Live checks” – that is, checks can be cashed immediately – precisely at a time when 88 million citizens are anxiously awaiting checks for their economic impact payment, “Senators wrote on Wednesday in a letter to the bipartisan leaders of the Senate Banking Committee and the House Financial Services Committee. . “Consumers have recently been confused when they receive unsolicited loan checks in the mail and cash them thinking they are government stimulus checks. Instead, they are even more in debt.

“We urge you to consider including the unsolicited loan law in the next coronavirus package. This will ensure that taxpayers get through these stressful times without any additional unnecessary economic hardship ”, the letter continues.

Biparty legislation is supported by the National Consumer Law Center.

The full letter is below:

May 6, 2020

Dear President Crapo, Ranking Member Brown, President Waters and Ranking Member McHenry:

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As you contemplate the next pandemic relief plan, we write to highlight financial scams in which Americans receive unsolicited “live checks” – that is, checks can be cashed immediately – precisely at a time when 88 million citizens are anxiously awaiting checks for their Economic Impact Payment (EIP). To be clear, these controls come from entities that have no relation to these consumers. The consumer has never taken a single action to request these checks: not a click of the mouse, not a phone call.1

In response, we ask that this predatory practice be addressed in the next package by including section 3036, The Unsolicited Loan Act, to prohibit lenders from providing unsolicited loan checks.

Unsolicited loan checks arrive in the mail and consumers may unwittingly cash them believing the checks are from the government or their trusted financial institution. However, these checks are actually high interest loans that consumers are forced to repay the loan according to the terms of the contract.2 We note that the 88 million people waiting for their EIP checks are disproportionately old or on disability income.

Under your leadership, Congress has allocated funds to go directly to consumers in the CARES Act (HR 748) to help them put food on their tables and keep a roof over their heads. Unfortunately, consumers have recently been confused when they receive unsolicited loan checks in the mail and cash them thinking they are government stimulus checks. Instead, they are even more in debt. Of course, these companies are free grant loans to these consumers when they wish, provided the loan has been requested.

We urge you to consider including the unsolicited loan law in the next coronavirus package. This will ensure that taxpayers get through these stressful times without any additional unnecessary economic hardship.


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