US House Passes Gramm-Leach-Bliley Relief for Debt Buyers

The U.S. House of Representatives late Monday passed by voice vote a bill that contains language eliminating a debt purchaser’s obligation to send annual consumer privacy notices under the Gramm-Leach-Bliley Act.

Passage of the bill represents a long battle to remove the superfluous requirement of forcing debt buyers to inform consumers that the personal information they collect will be safe. Current GLB rules require debt purchasers to send notices that explain where the information is shared, how it is used, and how the information is protected.

But the Fair Debt Collection Practices Act (FDCPA) prohibits debt buyers from sharing with third parties information they collect from consumers. Still, debt purchasers had to send the GLB notices every year, at a cost of $25 million annually, according to debt purchasing trade group DBA International.

“The cost of the mailings to our members was one thing, but the administration costs of handling the incoming calls from consumers who were confused over the intent of the notice was equally troubling,” said Kristin Dougherty, President of DBA International, in a statement Tuesday.

DBA has lobbied for the passage of the bill for more than a year. The association said there was broad bipartisan support for removal of the requirement. “It’s not that controversial of a bill,” Bob Belair, founding partner of Washington law firm Oldaker, Biden and Belair which represents DBA on Capitol Hill, told insideARM in April (“Bill would Ease GLBA Pressure on Debt Buyers,” April 4).

The bill that passed Monday was HR 6312, the Credit Union, Bank, and Thrift Regulatory Relief Act of 2008. The language that offers debt buyers relief from the GLB requirement was folded into the larger bill from a standalone bill, HR 1967, which was introduced in early 2007 and co-authored and sponsored by Rep. Peter Roskam (R-Ill.) and Rep. Jim Marshall (D-Ga.). It had gained broad support across party lines before being folded into HR 6312.

“The passage of this bill just makes good sense”, said Roger Knauf, Executive Director of DBA International. “Debt buyers are the only financial organization in America who are both required to send the annual GLB consumer privacy notice, and are also prohibited under FDCPA from sharing consumer information in the first place.”

DBA said that it will work diligently to ensure the bill’s passage in the Senate.