The House passed H.R. 2547 by 215-207 Thursday with changes to debt collection and credit efforts, reporting mostly along party lines. ACA International is continuing its advocacy to show why overbroad efforts in these bills would ultimately harm not only ACA members and their employees, but also businesses and consumers as the bill heads to the U.S. Senate. Editor’s note: This article is available for members only.
5/13/2021 17:00
The U.S. House of Representatives passed the Comprehensive Debt Collection Improvement Act, H.R. 2547, Thursday 215-207 mostly along party lines, which means the U.S. Senate will now consider the bill with extensive reforms to debt collection. ACA International expects the bill will face an uphill battle in the Senate.
H.R. 2547 would make extensive changes to the ability to collect, including delaying the ability to collect medical debt for two years, add new requirements to the Consumer Financial Protection Bureau’s rule for sending emails and new damages to the Fair Debt Collection Practices Act, among other changes.
House Financial Services Committee Chairwoman U.S. Rep. Maxine Waters, D-Calif., the lead author of the bill, and U.S. Rep. Blaine Luetkemeyer, R-Mo., a House Financial Services committee member and ranking member of the Subcommittee on Consumer Protection and Financial Institutions and House Committee on Small Business, testified before the Committee on Rules Wednesday and debated the bill.
Legislators proposed several amendments for the Committee on Rules hearing, ranging from notice requirements for debt collection and studying the impacts of the bill to ensuring consumer access to credit and business operations before the vote on the House floor Thursday.
Luetkemeyer said during hearing that he opposes the bill in its current form and the process to bring it to the House floor for a vote.
“Contrary to the title of this piece of legislation, this bill will not improve debt collection in this country. It will not help those Americans who continue to feel the impact of the pandemic and state and local lockdowns. This bill, if enacted, will undermine our credit markets, hurt small businesses and ultimately make credit more expensive and less accessible for those who need it most,” Luetkemeyer said in his testimony. “Every member of Congress believes that consumers who owe a debt should be treated with respect and dignity. They should not be subjected to abusive and harassing behavior and they should be able to work out payment options. This premise is already codified in the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. Yet, since taking the majority in the House, Democrats have used their one-party rule to push policies and undermine some of the most fundamental principles of a free-market economy in order to cater to the progressive left.”
Luetkemeyer introduced an amendment to the bill to direct the Government Accountability Office to study and report to Congress within one year about how restricting debt collection will impact low to moderate-income and minority borrowers, with the bill becoming effective upon the report’s release.
Waters contended the bill combines several needed reforms to debt collection that the House Financial Services Committee has been working on for years and does include bipartisan elements, such as the Fair Debt Collection Practices for Servicemembers Act, H.R. 1491, sponsored by U.S. Rep. Madeleine Dean, D-N.Y. This bill amends the FDCPA requirements on communication with military service members about debts. The bill, which ACA did not oppose, passed in the U.S. House of Representatives in April this year, ACA previously reported.
Opponents to the Waters’ bill said it goes too far in those reforms and in fact would restrict access to credit for consumers.
“Simply put, this legislation undermines the collection process, the very system that ensures consumers can access credit in the first place,” said U.S. Rep. Tom Emmer, R-Minn., during his remarks on the House floor.
More than a dozen amendments were introduced as part of the final version of H.R. 2547 up for consideration by the House.
McHenry proposed a substitute amendment to H.R. 2547 seeking bipartisan support for several targeted approaches to improve the debt collection and credit reporting framework, including a clear disclosure when a confession of judgment is part of a business contract. It would also require lenders to obtain a written affidavit with the date and nature of a borrower’s default to execute a confession of judgment.
U.S. Rep. Michael Burgess, R-Texas, introduced an amendment that states, prior to enacting this legislation, the Treasury Secretary shall certify that this legislation will not limit the availability of debt products or increase their cost for Americans without a credit history, Americans with poor credit history, or Americans from lower socio-economic backgrounds.
Opponents to the bill, including U.S. Rep. Ann Wagner, R-Mo., said the Democrats’ amendments go further to harm consumers the bill is intended to help as well as businesses in financial services.
“This bill, and the [Democrats’] amendments, will drive up all costs for all borrowers,” Wagner said. “Many of these amendments were not even considered during markup and could result in unintended consequences and conflict with existing law and regulations.”
McHenry’s substitute amendment did not pass. H.R. 2547 passed with amendments from the Democrats, available here.
What’s Next for H.R. 2547
ACA proactively reached out to schedule and hold hundreds of meetings with congressional staff and members of Congress last year to educate them about why overbroad efforts in these bills would ultimately harm not only ACA members and their employees, but also businesses and consumers.
Members also participated in a grassroots letter campaign to stop the bill and continue to educate lawmakers this month before the House vote.
The bill is expected to face an uphill battle in the U.S. Senate and ACA is already advocating for it not to move forward in that chamber.
ACA will continue to work on advocacy with its members, Congress, and industry trade group coalition partners before the legislation is considered by the U.S. Senate.
“ACA appreciates that many members of Congress spoke out against this flawed legislation and voted against it, however, is disappointed it ultimately passed with a narrow margin,” said Vice President and Senior Counsel of Federal Advocacy Leah Dempsey. “ACA and its members will continue to educate lawmakers about why this bill harms not only our industry, but creditors and ultimately consumers throughout the country.”