Proposed FDCPA and Other Debt Collection Changes Move Forward in Congress

In November, the House Financial Services Committee passed several bills that would significantly expand consumer protections and impact how and when creditors can engage in collection efforts. The proposed amendments to the Fair Debt Collection Practices Act (FDCPA) and other federal laws will now move forward to the full House for consideration.

Here is what creditors need to know about the seven debt collection bills that made it out of committee:

• The Ending Debt Collection Harassment Act of 2019 (H.R. 5021). This bill amends the FDCPA to prohibit debt collectors from contacting consumers by email or text message without the consumer’s consent to be contacted electronically. It also prevents the Consumer Financial Protection Bureau (CFPB) from issuing any FDCPA rules that would permit debt collectors from sending unlimited email and text messages to consumers.
• The Stop Debt Collection Abuse Act (H.R. 4403). Passed unanimously, this bill extends the FDCPA’s protections regarding debt owed to a federal agency, places limits on the fees debt collectors can charge, and clarifies that the FDCPA covers debt buyers.
• The Small Business Fair Debt Collection Protection Act (H.R. 5013). The FDCPA’s protections would be expanded under this bill to cover small business loans.
• The Fair Debt Collection Practices for Servicemembers Act (H.R. 5003). Passed unanimously in committee, this bill amends the FDCPA to prohibit debt collectors from threatening servicemembers or their families with a reduction in rank, revocation of security clearance, or prosecution under the Uniform Code of Military Justice. It also prohibits debt collectors from communicating with anyone in a servicemember’s chain of command to locate a servicemember.
• The Non-Judicial Foreclosure Debt Collection Clarification Act (H.R. 5001). Reversing the Supreme Court’s recent decision in Obduskey v. McCarthy & Holthus, LLP, this bill amends the FDCPA to clarify that the law covers entities in non-judicial foreclosure proceedings.
• The Debt Collection Practices Harmonization Act (H.R. 3948). This legislation clarifies that the FDCPA covers private debt collectors who pursue debts such as municipal utility bills, tolls, traffic tickets, and court debts.
• The Small Business Lending Fairness Act (H.R. 3490). Amending the Truth in Lending Act (TILA), this bill restricts the use of “confessions of judgment” clauses in small business loan contracts

We will continue to monitor and provide updates as to the progress of these bills as well as any other legislative or regulatory developments that may impact the rights of creditors and debt collectors.

Aggressive and Effective Collections for Michigan Creditors

If you have questions about these bills or need assistance with your collection efforts, please contact Ray Schultz today at RSchultz@kehb.com or call him at (616) 254-8400 to discuss your situation and the rights and remedies available to you as a creditor.