House Committee Sets Markup on Debt Collection Legislation

In letter to committee leaders, ACA International outlined industry and consumer impacts of some legislation slated for review starting Nov. 13.

11/11/2019 8:00 AM

ADVOCACYNEWSGOVERNMENT

House Committee Sets Markup on Debt Collection Legislation

ACA has been advocating on several Fair Debt Collection Practices Act legislative proposals slated for markup during a House Financial Services Committee hearing Wednesday, Nov. 13.

Building on advocacy progress in a September debt collection practices hearing before the House Financial Services Committee, ACA submitted a letter for the committee to consider regarding its discussion of several bills and draft legislation that could impact the accounts receivable management (ARM) industry.

In the letter to committee Chairwoman Maxine Waters, D-Calif., and Ranking Member Patrick McHenry, R-N.C., ACA CEO Mark Neeb shared the impact  extending the Fair Debt Collection Practices Act to additional types of debt proposed in some of the legislation would have on the ARM industry; while equally expressing support for striking a balance in proposals focused on medical debt and time-barred debt, for example.

One bill discussed during the September hearing, the “Stop Debt Collection Abuse Act,” (H.R. 4403), sponsored by U.S. Reps. Emanuel Cleaver, D-Mo., and French Hill, R-Ark., would extend the FDCPA to collectors of debt owed to a federal agency and limit any interest, fee, charge, or expense incidental to the principal obligation. The bill also mandates that debt buyers are subject to the FDCPA.

Reps. Cleaver and Hill are expected to introduce an amendment  to the legislation during Wednesday's markup defining debt and debt collector and setting a time limit for federal agencies to transfer or sell debt to a debt collector.

“ACA has several concerns about this bill,” Neeb said.  “Under the Obama administration, Congress has previously recognized the need for certain exemptions for debts owed to or guaranteed by the federal government in the Bipartisan Budget Act of 2015. Communicating about debt owed to the government is unique, for example, providing information about outstanding student loans may help borrowers avoid penalties or other negative consequences such as the ability to obtain a federal government job.”

The bill also requires a Government Accountability Office study on the use of debt collectors by local, state and federal agencies. 

“We support this aspect of the bill and are confident that this study will be in line with other research in this area, which shows both consumer and economic benefits from debt collection efforts for the government,” Neeb said.

ACA expresses a similar view about a bill also designed to extend the reach of the FDCPA. The “Debt Collection Practices Harmonization Act,” (H.R. 3498) proposed by U.S. Rep. Gregory Meeks, D-N.Y., which would extend the FDCPA to cover debt owed to a state or local government and adds specific requirements for natural disasters.

“Collecting government owed debt is an important part of a functioning economy and there may be a unique need for consumers to be able to efficiently resolve debts owed to a local government,” Neeb said. “Allowing professionals in the accounts receivable management industry to aid local and federal government in collection efforts, benefits both consumers and the economy, since it is done in an efficient way.”

Meeks is also expected to introduce amendments  to the legislation Wednesday.

The committee also recently discussed “Monitoring and Curbing Abusive Debt Collection Practices Act,” (H.R. 4664), which would amend the Consumer Financial Protection Act of 2010 to require the director of the CFPB to issue a quarterly report on debt collection complaints and enforcement actions, and prohibit the director of the CFPB from issuing rules that would allow a debt collector to send unlimited email and text messages to a consumer.

ACA would be interested in additional reporting on the complaint database if it more accurately portrayed what the raw complaint data means for the accounts receivable management industry.

ACA sees the legislation as misguided in its interpretation that debt collectors would be able to “send unlimited email and text messages to a consumer” under the CFPB’s proposed rule, according to Neeb.

“Alternatively, the CFPB’s proposal concerning sending email and text messages instead addresses modern forms of communication and gives unprecedented power to consumers to control those modes of communication,” Neeb said. “Most notably, consumers have the ability to opt-out of receiving messages and also control the contact information that they provide to creditors.”

H.R. 4664 is not on Wednesday’s agenda.

Read Neeb’s complete letter to the committee on ACA’s Advocacy Resource Center webpage.

The committee will meet for a markup  starting at 2 p.m. EST, Nov. 13, 2019 with a possible continuation on Nov. 14. ACA will provide updates on the discussion of these legislative proposals in ACA Daily.

Meanwhile, U.S. Rep. Lacy Clay, D-Mo., a member of the committee, introduced legislation to amend the FDCPA  to “clarify that the definition of a debt collection includes, in all cases, a person in a business the principal purpose of which is the enforcement of security interests.”

The bill, H.R. 5001, was referred to the House Financial Services Committee for consideration.