Continuing a state regulatory trend, a bill has popped up in the Council for the District of Columbia that would tighten rules related to debt buyers.
The complete bill is in the following link: http://lims.dccouncil.us/Download/33762/B21-0190-Introduction.pdf
While this bill has quite a way to go before becoming law, we noticed the following elements that are concerning and worth watching as a trend:
- Makes a violation of the FDCPA a violation of local law (line 114)
- Specific items are required in order for the debt collector to attempt to collect (not just in response to a validation request) (line 116), and all would need to be provided in the validation notice (line 136)
- Items are onerous, such as pre-charge off interest, post-charge off interest and fees and whether they were imposed by the original creditor or any subsequent owners of the debt
- If the applicable statute of limitation expires, any subsequent payment or written/oral affirmation of the debt does not re-toll the debt (line 143)
- Debt buyers are prohibited from collecting time barred debt (line 146)
- Debt buyers must provide proof that they have the ownership and rights to collect a purchase debt within 15 days of a receipt of a consumer’s request (doesn’t say whether verbal or written) (167)
- Specific requirements for debt buyers when filing a lawsuit on a purchased debt
- Civil penalties for violation of the legislation
We couldn’t find a provision that applies the legislation to debt purchased after a particular date, so it could apply retroactively.
Excerpted from the bill:
D.C. B21 190 – DEBT COLLECTION (GENERAL REQUIREMENTS)
Sponsor: Councilmember Mary Cheh (D)
Summary: Enacts the Debt Buying Limitation Amendment Act of 2015. Prohibits the use of any unfair, abusive, harassing, fraudulent, deceptive or misleading representation, device or practice to collect a consumer debt or to obtain information concerning consumers in any way. Requires the possession of the following information by a debt collector in order to collect or attempt to collect a consumer debt:
- the name of the current creditor or owner of the consumer debt;
- the original creditor’s name at the time of charge-off, if different from the current owner of the consumer debt;
- the original creditor’s account number for the consumer at the time of charge-off;
- the principal amount due at charge-off;
- an itemization of interest and fees that accrued before being charged-off, claimed to be owed;
- an itemization of interest and fees that accrued after being charged-off, if any, claimed to be owned and an indication of whether said interest and fees were imposed by the original creditor or any subsequent owners of the consumer debt;
- the date that the consumer debt was incurred provided that in the case of a revolving credit amount, the date that the consumer debt was incurred shall be the last extension of credit made for the purchase of goods or services, for the lease of goods or as a loan of money;
- the date and amount of payment;
- the names of all entities that owned the consumer debt after the original creditor;
The debt collector is required to provide this information to the consumer in writing within five days after the initial communication with the consumer and requires all collection efforts regarding such consumer debt to cease until such information is provided.
Status: Introduced; referred to Committee on Business, Consumer and Regulatory Affairs 5/5/2015.
Outlook: The reporting of this measure was delayed due to an administrative delay by the D.C. Council Legislative Services. The sponsor of this measure is a member of the majority party and does not serve in the committee of referral. The measure was also introduced by Councilmember Anita Bonds (D) who also does not serve in the committee of referral. The Democratic Party controls the Council as well as the Office of Mayor.
Unique to the District of Columbia, an approved Act of the Council must be sent to the United States House of Representatives and the United States Senate for a period of 30 days before becoming effective as law. During this 30-day period of congressional review, Congress may enact into law a joint resolution disapproving the Council’s Act. If, during the 30-day period, the President of the United States approves the joint resolution, the Council’s Act is prevented from becoming law. If, however, upon the expiration of the 30-day congressional review period, no joint resolution disapproving the Council’s Act has been approved by the President, the bill finally becomes a law and is assigned a law number.
Effective Date: Upon Congressional approval
insideARM will continue to monitor this bill and report on its progress.