Bills Targeting ARM Industry Advance in North Carolina Senate
A bill that would see debt buyers regulated in the same manner as collection agencies passes a vote in the NC Senate. The bill also increases the penalties for violations of collection laws.
The North Carolina state Senate Tuesday approved a bill on second reading that would include debt buyers in the definition of “collection agencies,” requiring them to be governed under the same rules. The bill also doubles the maximum fine for violations of state collection law.
The legislation, SB 954 – with a short title of “Protections From Abusive Debt Buyers -- passed with a unanimous vote of 48-0 in the Senate on its second reading before the body. A third reading, and a potential final vote, is scheduled for Wednesday.
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The bill’s main purpose, according to its sponsor Sen. Martin Nesbitt, D-Buncombe, was to bring debt purchasers under the same rules as collection agencies. The bill also targets collection actions against debtors that have filed for bankruptcy protection and requires debt collectors to disclose to consumers their rights surrounding debts that are beyond North Carolina’s statute of limitations.
In addition to new restrictions on collection activity, the bill would increase the cap on civil liability for violations to $4,000 per violation from $2,000.
If the bill passes its third reading on Wednesday, it would go before the state’s House.
A Senate Committee separately Tuesday approved another bill that, like SB 954, would redefine a debt buyer as a collection agency. The bill would also require debt purchasers to provide 45 days notice to a debtor before filing a lawsuit. The new rules also layout what information must be provided in the notice, such as the name, address, and telephone number of the debt buyer, the name of the original creditor and the debtor's original account number, a copy of the contract or other document evidencing the consumer debt, and an itemized accounting of all amounts claimed to be owed.
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Comment from Anonymous on May 13, 2009 at 1:41PM EST
This will cripple the Debt Buyers ability to further tarnish our industry.
Comment from DONALD DALY on May 13, 2009 at 3:40PM EST
It is about time. I believe if any state does not follow suit that state should also abolish their state version of the FDCPA and give us all a free hand (joke).
Comment from Voice of Reason on May 13, 2009 at 7:02PM EST
"Why should I struggle to pay all of my debts and credit card bills every month when legislation such as this enables people to walk away from their debts without paying? I feel that Senate Bill 954 is unnecessary as the current US Bankruptcy Code is already available to help people out when they find themselves in a situation where they cannot afford to pay their bills. Doesn’t this legislation allow a person to charge up credit cards, and so long as they have no assets or a jointly owned home in NC, stick it to the lenders? This will do nothing more than cause lenders to stop giving credit cards to average people who may have less than perfect credit. It will also force those of us who pay our bills to pay higher interest rates for our credit to offset the money that the deadbeats are failing to pay back. "
Comment from Mike on May 13, 2009 at 9:41PM EST
This kind of thing really weighs on the morals of good people trying to pay their bills. If you actually read the proposed bill, it makes it next to impossible for the credit card companies and their successors in interest to use the legal process to enforce their legal rights. It looks like a signed application is required to go after someone not paying their bills. I have two credit cards that I signed up for on-line and a signature wasn't required, which seems to be the normal way credit is extended these days. I want to pay my bills but if I stop paying them and this bill passes, it doesn't look like anyone can force me to pay. That weighs on my moral compass because I firmly believe it would be equivalent to stealing but the government would be saying it was ok.