From California to Washington: State Laws on the Horizon This Year

ACA International’s state advocacy and compliance leaders along with member Lauren Valenzuela reviewed new state laws during a recent Hot Topic seminar—a must-listen for all organizations planning for 2022 and beyond.

01/13/2022 9:30 A.M.

4 minute read

The accounts receivable management (ARM) industry and ACA International saw a flurry of activity in 2021. Although Regulation F and the Hunstein letter vendor case have been at the center of attention at the federal level, states and municipalities from coast to coast were also busy with ARM industry legislation and regulations.

To provide an overview of the state and municipal activity, Valenzuela joined ACA’s Vice President of State Unit and Government Affairs Andrew Madden and Senior Counsel Colin Winkler on a recent Hot Topic seminar, “From Coast to Coast, 2021 was a Year of Change.”

A recording of the seminar is available for purchase here, or can be accessed at no additional charge by All-Access Training Zone subscribers.

Once you purchase the Training Zone, you and everyone at your location will have access to all Core Curriculum and Hot Topic webinars, as well as past webinar recordings—no access code required.

Here are a few highlights from the Hot Topic seminar featuring legislation updates in Washington, D.C., New York and California that could set a precedent for other states to follow suit in the future.

Washington, D.C., Debt Collection Legislation

  • Temporary emergency legislation, the Protecting Consumers from Unjust Debt Collection Practices Emergency Amendment Act of 2021, was introduced last year and enacted temporary amendments related to consumer communication and debt documentation.
  • The bill amends Washington, D.C.’s code, Section 28-3814, on an emergency basis. The Washington, D.C., code currently includes temporary amendments that will expire on Feb. 4, 2022.
  • The bill is intended to “protect D.C. consumers from abusive and unfair debt collection practices after the district’s temporary COVID-19 protections end and debt collection activity resumes.”
  • The Washington, D.C., City Council reviewed a permanent version of the bill at a November 2021 public hearing, and there will be a markup of the bill in January or February of this year.
  • The temporary legislation currently in place would expire on June 9, 2022, if not replaced by a permanent bill before that date.

New York

New York had one of the busiest legislative sessions tracked by ACA and its state units—in this case, the New York State Collectors Association.

In 2021, legislation was introduced in New York that would have implemented a statewide licensing program along with some onerous documentation and collection procedures. ACA and the NYSCA worked closely with a large coalition of ARM industry lobbyists to advocate for amendments. The legislation was eventually tabled and did not receive a vote before the legislature adjourned in June 2021.

Gov. Kathy Hochul also signed a bill to reduce the statute of limitations in New York to three years as well as a bill to require debt collectors to inform consumers in each initial communication that written communications are available in large print format, ACA previously reported.

The large print disclosure law took effect on Nov. 7, 2021, and states, “Each and every principal creditor or debt collector shall, in each initial communication, clearly and conspicuously disclose to the debtor that each communication can be provided in an alternative, reasonably accommodable, format.”

The statute of limitations law, the Consumer Credit Fairness Act, establishes a three-year statute of limitations for most lawsuits arising from a consumer credit transaction and prohibits the revival or extension of the limitations period based on subsequent payments, written or oral affirmation or other activity.

The prohibition on revival or extension of the statute of limitations takes effect on April 6, while all other amendments will take effect on May 6.

“This act affects both debt collectors and debt buyers filing lawsuits in New York,” Madden said.

2021 Trends and Beyond

The recent Hot Topic seminar also covered medical debt and licensing laws in Maryland, Connecticut, California and Nevada.

California is beginning to process debt collection licensing applications as required under the Debt Collection Licensing Act and recently addressed delays in processing applications.

Before the end of 2021, the California Department of Financial Protection and Innovation (DFPI) had received approximately 600 applications for debt collection licenses, which were required to be submitted via the Nationwide Multistate Licensing System & Registry (NMLS) no later than Dec. 31. At the time, the DFPI assured applicants that as long as they submitted an application by Dec. 31, they could “continue to operate in California pending the denial or approval of their application,” ACA previously reported.

In Minnesota, active and passive debt buyers are required to have a license as of Jan. 1 and the Minnesota Department of Commerce developed a list of Frequently Asked Questions to help debt buyers follow the new law.

Access the Hot Topic seminar recording for more insights on state laws and trends in call frequency limitations, consumer disclosures and data security requirements.

For continued state updates, ACA members are invited to join the weekly ACA Huddle here.


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