House Subcommittee Considers Bipartisan Legislation on Debt Collection Practices

7/14/2017 12:00:00 AM

The Stop Debt Collection Abuse Act of 2017, H.R. 864, was among nine bills reviewed during a hearing on Examining Legislative Proposals to Provide Targeted Regulatory Relief to Community Financial Institutions.


The House Financial Services Subcommittee on Financial Institutions and Consumer Credit considered several pieces of legislation July 12, including U.S. Rep. Mia Love’s, R-Utah, proposal to amend definitions in the Fair Debt Collection Practices Act and require the Government Accountability Office (GAO) to study debt collection practices at the federal, state and local levels.

“Just to give everyone an idea, H.R. 864, the Stop Debt Collection Abuse Act, was a bipartisan effort on behalf of myself, [U.S. Reps. Keith Ellison, D-Minn., Emanuel Cleaver, D-Texas and French Hill, R-Ark.] to make sure that the federal government uses the same practices that the private [debt collection] sector uses,” Love said.

Love’s legislation was re-introduced in the 115th Congress. 

The legislation was among nine proposals considered by the subcommittee during a hearing, “Examining Legislative Proposals to Provide Targeted Regulatory Relief to Community Financial Institutions.”

Witnesses included:

  • Robert Fisher, president and CEO, Tioga State Bank, on behalf of the Independent Community Bankers of America.
  • Rick Nichols, president and CEO, River Region Credit Union, on behalf of the Heartland Credit Union Association.
  • Scott B. Astrada, director of Federal Advocacy, Center for Responsible Lending.
  • Professor J.W. Verret, senior affiliated scholar, associate professor, George Mason University School of Law.

Specifically, H.R. 864 would amend the FDCPA, including classifying debt buyers as “debt collectors” and subjecting debt collectors for federal agencies to FDCPA requirements.

The bill would also require the GAO to study debt collection practices at the federal, state and local levels.

"H.R. 864 would also require that debt collectors, working on behalf of the federal government, cannot charge fees that are more than 10 percent of the amount collected from a consumer,” according to a memorandum for the subcommittee hearing.

During the hearing, Love said she is also focused on the “federal government’s use of private debt collection and agencies to assist in its debt collection uses and efforts.”

For example, the Internal Revenue Service is now mandated under the Fixing America’s Surface Transportation Act to use private debt collection agencies to recover unpaid tax debt, she said.

The IRS started this program in April this year.

She also stressed the important role of debt collection in consumer credit lifecycles, noting a recent report from the Federal Reserve Bank of New York with research on how it supports a credit-based economy.

“The analysis found that restricting collection activity leads to a decrease in access to credit across the full spectrum of borrowers and to the deterioration of indicators of financial health,” Love said. “It’s very important as always that we find the right balance between protecting consumers and making sure we don’t inadvertently restrict credit availability.”

ACA International will continue to monitor the legislation and keep membership apprised of further developments.   

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