The Folly of Credit As Pandemic Relief

Authors

Pamela Foohey
Dalié Jiménez
Christopher K. Odinet, Texas A&M University School of LawFollow

Document Type

Article

Publication Date

6-2020

Journal Title

UCLA Law Review Discourse

Abstract

Within weeks of the coronavirus pandemic appearing in the United States, the American economy came to a grinding halt. The unprecedented modern health crisis and the collapsing economy forced Congress to make a critical choice about how to help American families survive financially. Congress had two basic options. It could enact policies that provided direct and meaningful financial support to people, without the necessity of later repayment. Or it could pursue policies that temporarily relieved people from their financial obligations, but required that they eventually pay amounts subject to payment moratoria later.

In passing the CARES Act, Congress primarily chose the second option. This option reflects a belief that offering people credit can bring them meaningful relief because it assumes that people will have the ability to pay back the loan as it becomes due. The assumption that people will be able to repay credit masquerading as “relief” in the wake of the pandemic is a serious error that will have enduring negative consequences.

In short, Congress got the balance between providing true money versus what amount to credit products to Americans fundamentally backwards. But given that, unfortunately, the effects of the pandemic likely will continue for months, if not years, it is not too late for Congress to adopt a family financial well-being approach to relief that provides meaningful, widespread, and expanded direct payments to households in distress.

First Page

126

Last Page

145

Num Pages

20

Volume Number

68

Publisher

UCLA School of Law

Notes

Available online at: https://www.uclalawreview.org/the-folly-of-credit-as-pandemic-relief/

Recommended Citation

Pamela Foohey, Dalié Jiménez & Christopher K. Odinet, The Folly of Credit As Pandemic Relief, 68 UCLA L. Rev. Disc. 126 (2020).
Available at: https://scholarship.law.tamu.edu/facscholar/2138

File Type

PDF