Rep. Maxine Waters [D-Calif.], ranking member of the House Financial Services Committee, this week reintroduced H.R. 10509, the Comprehensive Debt Collection Improvement Act. This legislation, first introduced in 2021, seeks to modernize federal debt collection laws while offering stronger protections for consumers facing various types of debt.
Key details: The proposed bill would bring several changes to current debt collection practices, including:
- Medical debt protections: Prohibits the collection of medical debt for two years after the debt is incurred, giving individuals more time to resolve their medical expenses.
- Consent for digital communication: Requires affirmative consumer consent before debt collectors can contact individuals via email or text message.
- Limits on fees: Restricts excessive debt collection fees that have historically affected low-income and minority borrowers.
- Small business protections: Bans the use of abusive confessions of judgment, a practice that has harmed small businesses.
- Servicemember protections: Prohibits the harassment and threats of servicemembers, including threats related to rank reduction or security clearance revocation.
Why it matters: Consumer advocacy groups have long pushed for updates to the 1978 Fair Debt Collection Practices Act, which many argue has not kept pace with evolving communication methods and the rise in medical debt. The legislation is aimed at safeguarding vulnerable populations, including servicemembers, students, and individuals burdened by medical or other types of debt.
The history: In 2021, the bill garnered support from 88 consumer, labor, and civil rights organizations and passed the House of Representatives. However, it did not advance in the Senate. This reintroduction renews the effort to enact these changes, with the backing of several co-sponsors, including Rep. Nydia Velazquez, Rep. Gregory Meeks, Rep. Emanuel Cleaver, Rep. Ayanna Pressley, Rep. Rashida Tlaib, Rep. Madeleine Dean, and Rep. Jake Auchincloss.
