The House of Representatives yesterday passed H.R. 2547, the Comprehensive Debt Collection Improvement Act, a collection of bills aimed at reforming how debts are collected in the United States. The bill passed by a vote of 215-207 and now heads to the Senate for its consideration.
The bill, which was officially sponsored by Rep. Maxine Waters [D-Calif.], the chairwoman of the House Financial Services Committee, was in fact a collection of eight different bills that were introduced by Democrats in the House. Those bills are:
- Small Business Lending Fairness Act
- Fair Debt Collection Practices for Servicemembers Act
- Private Loan Disability Discharge Act of 2021
- Consumer Protection for Medical Debt Collections Act
- Ending Debt Collection Harassment Act of 2021
- Stop Debt Collection Abuse Act of 2021
- Debt Collection Practices Harmonization Act
- Non-Judicial Foreclosure Debt Collection Clarification Act
The bill was amended in some form before it was approved by the House and those amendments had not yet found their way into an updated version of the bill on Congress’s website. But it is worth noting that one of the amendments would explicitly prohibit collectors from collecting or attempting to collect debts for which the statute of limitations had expired. It was not immediately clear if this amendment was part of the final bill that the House approved.
After characterizing the “often abusive and predatory” tactics of collectors, while also mentioning that “many” collectors “harass consumers with frequent phone calls, make threats, and provide misleading information to consumers,” Rep. Waters called out the industry for “poor record-keeping” during a speech on the House floor in support of her bill before it was voted on.
In opposition to the bill, Rep. Patrick McHenry [R-N.C.], the House Financial Services Committee’s top Republican, said that the bill will drive up the cost of credit to borrowers while eliminating a “fundamental” belief that people should be paid for services in a timely manner.
“The fact is, limiting the ability of businesses and individuals to be repaid for these services already provided will not benefit anyone,” Rep. McHenry said.
Rep. Waters did say in her remarks that people who owe lawful debts should repay them.
“But all Americans deserve to be free from harassment, undue pressure tactics, bullying, false information, threats, coercion, and the other bad practices that debt collectors have used with relative impunity,” she said. “The last time Congress made major updates to federal laws on debt collection was in 1978, over 40 years ago. It’s long overdue for Congress to act to provide stronger protections from abusive debt collectors for consumers.”
Among some of the provisions of the bills are:
- Prohibiting collectors from threatening to have a servicemember demoted for not paying a debt, having the servicemember’s security clearance revoked, or threatening prosecution under the Uniform Code of Military Justice.
- Discharging any private student loan in the event a student becomes permanently disabled or dies.
- Creating a two-year waiting period for attempting to collect on an unpaid medical debt while also notifying consumers prior to furnishing information about unpaid medical debts to credit reporting agencies.
- Requiring consumers’ consent before attempting to contact them via email or text messaging.
- Regulating collection practices for collectors hired by federal agencies.
- Increasing the penalties collectors can face when found to have violated the Fair Debt Collection Practices Act.
