Covid-19 Fraud Prevention Act

Floor Speech

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Mr. SHERMAN. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6735) to establish the Consumer and Investor Fraud Working Group to help protect consumers and investors from fraud during the COVID-19 pandemic, to assist consumers and investors affected by such fraud, and for other purposes, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 6735

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``COVID-19 Fraud Prevention Act''. SEC. 2. CONSUMER AND INVESTOR FRAUD WORKING GROUP.

(a) Establishment.--Not later than the end of the 30-day period beginning on the date of enactment of this Act, the Director of the Bureau of Consumer Financial Protection and the Securities and Exchange Commission shall, jointly, establish a working group to be known as the ``Consumer and Investor Fraud Working Group'' (the ``Working Group'').

(b) Duties.--The Working Group shall facilitate collaboration between the Bureau of Consumer Financial Protection and the Securities and Exchange Commission on--

(1) providing resources to consumers and investors to avoid fraud during the COVID-19 pandemic;

(2) providing resources, including information on the availability of legal aid resources, to consumers and investors who have been adversely impacted by such fraud; and

(3) such other topics as the Working Group determines appropriate.

(c) Coordination With Other Agencies.--In carrying out the duties described under subsection (b), the Working Group shall coordinate and collaborate with other Federal and State government agencies, as appropriate.

(d) Quarterly Report.--The Working Group shall issue a quarterly report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the progress of the Working Group and summarizing--

(1) the resources made publicly available to consumers by the Working Group;

(2) any public enforcement action taken jointly or individually by any member of the Working Group;

(3) the number and description of consumer complaints received by the Bureau of Consumer Financial Protection and the Securities and Exchange Commission regarding fraud related to the COVID-19 pandemic; and

(4) any other actions of the Working Group.

(e) Sunset.--This section shall cease to have any force or effect on and after December 31, 2021. SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.

The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled ``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.

Mr. Speaker, I rise to commend the gentleman from Utah on the passage of his bill, and I rise to support H.R. 6735, the COVID-19 Fraud Prevention Act, which is authored and put forward by Congresswoman Cindy Axne.

I support this legislation and I thank my colleague from Iowa for her leadership in bringing it forward. Congresswoman Axne's legislation will mark a major step in improving efforts to protect consumers and investors alike by requiring the Consumer Financial Protection Bureau, the CFPB, and the Securities and Exchange Commission, the SEC, to establish a joint working group with the purpose of addressing and preventing predatory and deceptive financial practices during this COVID-19 crisis.

Under this bill, this joint CFPB-SEC working group will be required to consult and collaborate with other Federal and State agencies, where appropriate, to ensure fraud does not slip through the cracks during this COVID-19 pandemic and appropriately report their efforts to Congress.

As we know, unfortunately, in times of uncertainty like the one we face today, predatory actors can and have sought to take advantage of confusion and financial vulnerability, and to take advantage even of desperation from struggling consumers and struggling homeowners who need help. These actors cause even further damage to communities that are already hit by the crisis of the pandemic and the economic downturn.

The 2008 crisis is an example of how much financial devastation that predatory and deceitful actors can wreak on our communities, especially when Federal regulators don't have the tools to cooperate and put a stop to it. Families that are still impacted by that phase of unchecked, toxic lending now have yet another crisis to contend to as we must deal with the COVID crisis.

As chair of the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, I note that investors, too, are at risk of being defrauded and mislead by fraudulent investment schemes.

As during other times of crises, investors are at risk of being defrauded and mislead by so-called investment opportunities claiming to have some novel information, cures, or vaccines, but are really part of a pump-and-dump scheme where fraudsters intentionally use false and misleading information to boost the price of a stock or other investment and then sell the shares when the stock rises but before the manipulation is detected.

Congresswoman Axne's legislation will help ensure that the CFPB and the SEC, as well as other Federal and State agencies they work with, will work collaboratively to identify problematic patterns and work to prevent future schemes where consumers and investors get ripped off.

I commend Mrs. Axne for her work in drafting this legislation, and if I may be a little premature, I also commend the gentlewoman on getting this legislation passed through the House today.

I urge Members to support this legislation, and I reserve the balance of my time.

Mr. Speaker, I thank the gentleman from South Carolina for his work on all of these bills and his work here today.

In closing, Congress must do more to ensure that communities are protected from deceitful actors during the COVID-19 period. As we have seen in our immediate past, bad actors often try to take advantage of people in crisis and the consequences can be significant unless the Federal Government, working with the States, actively monitors and prevents such deceitful practices.

H.R. 6735 will encourage key regulators to share information and work together to identify scams while keeping Congress informed as to how these agencies are addressing fraud during the pandemic.

This bill has the support of consumer and investor advocate organizations including: Americans for Financial Reform, Center for Responsible Lending, Consumer Federation of America, National Consumer Law Center, and Public Citizen.

I would like to thank the author of this bill, Representative Axne, for her efforts. I urge all Members to support H.R. 6735, and I yield back the balance of my time.

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