[Congressional Record (Bound Edition), Volume 150 (2004), Part 6]
[Extensions of Remarks]
[Page 7690]
[From the U.S. Government Publishing Office, www.gpo.gov]




      INTRODUCTION OF THE FEDERAL DISASTER CONSUMER PROTECTION ACT

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                       HON. MADELEINE Z. BORDALLO

                                of guam

                    in the house of representatives

                        Tuesday, April 27, 2004

  Ms. BORDALLO. Mr. Speaker, today I am introducing legislation that 
would protect the credit histories of consumers residing in areas where 
damages caused by a disaster impede the efficient payment of debts. My 
bill would provide an important safeguard for individuals living in 
disaster-prone regions in order to ensure that their financial 
histories are not adversely affected by an inability to make prompt 
payments during and in the immediate aftermath of a Federally Declared 
Disaster Area.
  I am concerned that public law does not provide a consistent legal 
means for consumers to rectify credit discrepancies occurring during a 
period in which their residence was included in a Federally Declared 
Disaster Area as defined by the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act. While I understand that many financial 
institutions do institute voluntary programs to give such customers 
reasonable flexibility in making payments, I also understand that these 
policies are not required nor are they uniform. Additionally, even 
where voluntary policies are instituted on the part of financial 
institutions, inevitably some mistakes will be made. The process of 
reconciling a credit report is often very difficult and time consuming, 
and disaster victims already face enough burdens during the recovery 
process.
  The Federal Disaster Consumer Protection Act will assist victims of a 
disaster by allowing for a 7-day grace period beginning on the date on 
which the disaster area is declared. If the due date on a payment falls 
on 1 of those 7 days, an affected consumer would be able to request 
that any adverse credit report as a result of a late payment be removed 
from his or her credit history. To prevent abuse, the consumer would 
had to have made his or her account current within 30 days of the due 
date in order to exercise this protection. This legislation would also 
give the Secretary of the Treasury discretion to extend the grace 
period if he or she sees fit.
  My bill proposes minimal standards that should not be a burden on 
those responsible financial institutions that already have a fair 
policy for dealing with consumers adversely impacted by a disaster. 
While I do believe that financial institutions should implement fair 
policies with regard to bank fees and other penalties for late payment 
during a disaster, my bill does not impose any new regulations with 
regard to these issues. The sole purpose of this legislation is to 
protect the consumer's credit. Support for this legislation will help 
reduce the risk of inaccurate credit reporting impeding the financial 
recovery of already vulnerable consumers residing in a Federally 
Declared Disaster Area.

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