While it’s natural to focus on the good news of vaccinations and economic growth after such an extraordinarily difficult year, the harms caused by the COVID-19 pandemic continue to put millions at risk, both medical and economic. One of the greatest potential tragedies unfolding is an unprecedented increase in housing insecurity, which we know not only threatens families financially, but which the Centers for Disease Control and Prevention has found can contribute to the further spread of the virus.
The federal government has stepped in with strong measures to help families during this crisis, and today we are announcing a new action that will help ensure vulnerable consumers can take advantage of their protections under the law.
The CDC has extended its moratorium on residential evictions through June 30, to keep people in their homes and out of shelters or other shared living settings, and to stop the spread of COVID-19. However, evictions have continued to this day. Some tenants may be unaware of their protections under the CDC order or may not understand the steps they have to take to receive the order’s protections. Others may have been improperly discouraged from submitting the required declaration.
Tens of thousands of tenants and families are being evicted every week, often without being told of their rights under the CDC moratorium. The scale of that is hard to wrap your head around, but for each individual or family seeing their belongings left on the curb, an eviction is a tragedy, a turning point, a challenge from which it is extremely hard to recover.
About 9 million tenant households are behind on their rental payments, while about 900,000 tenant households are evicted in a typical year. In other words, we are facing an eviction crisis roughly ten-fold the scale of the pre-pandemic normal.
So today we are announcing an interim final rule with a straightforward purpose. Our rule requires debt collectors to provide tenants who may have rights under the CDC order with written notice of those rights, so eligible people will have a chance to save their home. We are also clarifying today that debt collectors can be held accountable under federal law if they violate this requirement.
The CFPB is charged by Congress with administering the Fair Debt Collection Practices Act, and it is under that authority that we are taking this action. The FDCPA and today’s rule cover debt collectors, which can include attorneys who engage in eviction proceedings on behalf of landlords or residential property owners to collect unpaid residential rent.
The CFPB will move forward with investigations into debt collectors that act illegally, along with state attorneys general who have authority to enforce the FDCPA. The FDCPA includes a private right of action, so tenants may also hold debt collectors accountable.
This is an issue with important implications for racial equity. Like so much else about COVID-19, the economic damage has disproportionately affected communities of color. Job losses have been concentrated in low wage sectors, even while “essential” workers were required to put themselves at risk. Black and Hispanic households are roughly twice as likely to be behind on their rent, compared to white households. Black and Hispanic households are more than twice as likely to rent compared to white households, a disparity that denies them a key avenue of wealth accumulation.
We don’t have to look back very far to see how a housing crisis can cause widespread damage to the entire economy, and how economic turmoil can deepen inequalities. Communities of color still have not fully recovered from the damage of the Great Recession, and some of that damage is reflected in the homeownership numbers I just cited.
Millions of people across this country are struggling right now, and the coronavirus is still killing hundreds of people every day. We are going to continue doing everything we can to help the most vulnerable among us during this crisis.