In an email to its members, the National Lumber and Building Material Dealers Association (NLBMDA) warned a legislative initiative underway in the House of Representatives and Senate could affect the way LBM dealers extend credit and conduct collections. The NLBMDA said the legislation being proposed would “effectively designat[e]” LBM dealers as debt collectors.

The legislation, the Small Business and Consumer Debt Collection Emergency Relief Act, introduced in the House and Senate would negatively impact collections efforts for LBM dealers across the country, according to the NLBMDA.

The definition of “debt collector” in the legislation is defined as “a creditor, and any person or entity that engages in the collection of debt.”The current draft includes certain collection prohibitions, including business-to-business extension of credit and states interest and fees cannot be added to unpaid debts after the end of the coronavirus pandemic. Additionally, the legislation mandates communication in writing only and for informational purposes only.

According to the NLBMDA, these elements of the bill will not alleviate hardship for businesses and individuals, particularly LBM dealers. The association is opposed to the legislation and has set up a grassroots campaign for members to express their opposition to the legislation.

While the NLBMDA opposes the Small Business and Consumer Debt Collection Emergency Relief Act, it supports several elements of the Senate Republicans relief bill, including business liability protections, expanded PPP eligibility, business tax provisions, and reduced unemployment benefits.