A bill has been introduced in the House of Representatives that seeks to amend the Fair Debt Collection Practices Act. Introduced last week by Rep. Mia Love [R-Utah], the bill, H.R. 5434, has been referred to the House Financial Services Committee for consideration.
The bill is called the “Stop Debt Collection Abuse Act of 2016.”
The bulk of the amendments proposed by the bill would amend the FDCPA to specifically reference debts owed to, or guaranteed by the federal government.
For example, Section 803 of the FDCPA currently states:
The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.
Rep. Love’s bill would amend that sentence to read:
The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts; who regularly collects or attempts to collect, directly or indirectly, by the person’s own means or by hiring another debt collector, debts owed or due or asserted to be owed or due another or that have been obtained by assignment or transfer from another; or who regularly collects debts currently or originally owed or allegedly owed to a Federal agency.
The bill also calls for the General Accountability Office to issue an annual report that, studies the use of debt collectors by state and federal government agencies, including:
- The powers given to the debt collectors by Federal, State, and local government agencies;
- The contracting process that allows a Federal, State, or local government agency to award debt collection to a certain company, including the selection process;
- Any fees charged to debtors in addition to principal and interest on the outstanding debt;
- How the fees described in paragraph (3) vary from State to State;
- Consumer protection at the State level that offer recourse to those whom debts have been wrongfully attributed;
- The revenues received by debt collectors from Federal, State, and local government agencies;
- The amount of any revenue sharing agreements between debt collectors and Federal, State, and local government agencies;
- The difference in debt collection procedures across geographic regions, including the extent to which debt collectors pursue court judgments to collect debts; and
- Any legal immunity or other protections given to the debt collectors hired by State and local government agencies, including whether the debt collectors are subject to the Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.).
The bill also spells out when a federal agency can sell or transfer a debt to a third-party, and the steps that must be taken by the federal agency prior to transferring the debt to the third party.
