H.R.2547 – Comprehensive Debt Collection Improvement Act
Last week, the U.S. House of Representatives passed a bill, H.R. 2547, on a strict party-line vote. Titled “The Comprehensive Debt Collection Improvement Act, the bill would amend several consumer finance statutes for the first time in decades and impose new requirements and limitations on debt collectors, among others. Its fate now rests in the U.S. Senate.
With the Senate split 50-50 between Democrats and Republicans, it is unclear whether this bill will pass into law, and if it does, in what form. Debt collectors, loan servicers, attorneys, and others subject to these statutes should closely monitor this legislation for any new requirements and prohibitions.
What Does That Mean For Repossessions?
According to an article in Auto Remarketing in which they quoted the American Recovery Association said:
ARA went into six more elements about how the measure could impact vehicle repossessions, including:
• As debt collectors, repossession agents would have to notify the debtor by a written notice, specifying the amount of money owed, who the creditor is, and advise them of what action they should take if they contest the debt.
• All contact with the consumer would need to contain language identifying yourself as a debt collector. Contact must be free of profane or abusive language (so agents need to hold their tongue or face a federal lawsuit).
• It would strengthen the government’s grip over a repossession agency’s name (like “Final Notice” or anything vaguely aggressive) or anything that could be at all misconstrued as a governmental agency (like “Nevada Recovery Bureau” for example).
• It could make it a federal offense to damage any property in the course of a repossession. Hitting a mailbox, or even drag marks on a driveway could be considered an FDCPA violation, which would allow the consumer to sue finance companies and repo agents in federal court.
• Even a third party (a neighbor, a relative, etc.) seeing the repossession in process may be a violation by “publicizing” the debt, which is forbidden by the FDCPA. Debt collectors are not allowed to make the existence of a debt known to uninvolved third parties. This alone could easily make a repossession from a place of employment impossible if a car on the hook is seen by any other employee there.
• It would restrict the times of day or night when you might be in contact with the consumer, even inadvertently. A debtor coming out to the driveway to interrupt a repossession would be a violation if it occurred after 9 p.m., for instance.
Comprehensive Debt Collection Improvement Act
This bill generally provides additional financial protections for consumers and places restrictions on debt collection activities.
Regarding additional consumer protections, the bill
expands certain protections currently applicable to federally-backed student loans to private student loans, including by requiring the discharge of a private student loan in the event of the borrower’s death or total and permanent disability;
prohibits a consumer reporting agency from adding any information related to a debt arising from a medically necessary procedure to a consumer credit report and places restrictions on the reporting of other types of medical debt; and
applies certain consumer protections regarding debt collection to debt owed to a federal agency, to states, to debt buyers, and to businesses engaged in nonjudicial foreclosures.
It also prohibits certain loan conditions that limits a borrower’s opportunity to be heard in court in the event of default.
Additionally, the bill restricts debt collectors and debt collection practices by
prohibiting a debt collector from representing to a service member that failure to cooperate with a debt collector will result in a reduction of rank or similar action, and
limiting a debt collector’s electronic communications with a debtor without the debtor’s permission.
What Can I Do?
Contact your Senator and let them know that you oppose this bill. Click on the link below to learn how to contact your Senator.
Alternatively, you may phone the United States Capitol switchboard at (202) 224-3121. A switchboard operator will connect you directly with the Senate office you request.