Last week, we explained the Comprehensive Debt Collection Improvement Act (CDCIA).  To recap, the CDCIA is actually 8 separate bills relative to debt collection and covers the following topics:   

  • Amends TILA to restrict the use of confessions of judgment for small business owners.
  • Amends the FDCPA to prohibit debt collectors from threatening a servicemember.
  • Amends TILA to require the discharge of private student loans in the case of permanent disability of the borrower.
  • Bars entities from collecting medical debt or reporting it to a consumer reporting agency without giving a consumer notice about their rights under the FDCPA and the FCRA.
  • Amends the FDCPA to prohibit a debt collector from contacting a consumer by email or text message without a consumer’s consent to be contacted electronically.
  • Expands the definition of debt covered under the FDCPA to include money owed to a state or local government; municipal utility bills, tolls, traffic tickets, and court debts are subject to the FDCPA. It would also extend FDCPA protections related to a debt owed to a federal agency and limit the fees debt collectors can charge.
  • Updates monetary penalties for inflation, including class action limits, and clarifies that courts can award injunctive relief, as well as add protections for consumers affected by national disasters.
  • Amends the FDCPA to clarify that the statute covers non-judicial foreclosure proceedings.

As expected, on Thursday, March 13, 2021, the CDCIA passed in a 215- 207 vote.   Consumer groups are celebrating the vote, and after the vote passed, House Financial Services Chairwoman Maxine Waters had this to say:

During the pandemic crisis, which has harmed all of our communities, debt collectors have earned record profits. Their tactics are often abusive and predatory. Many debt collectors harass consumers with frequent phone calls, make threats, and provide misleading information to consumers. The debt collection industry is also plagued by poor record-keeping, resulting in many consumers being harassed for debts that they do not owe. Debt collection is among the top issues that the Consumer Financial Protection Bureau receives the most complaints about from consumers, and those complaints have risen since 2019.

Her full comments can be found here

In opposition to the bill, the House Financial Services Committee’s top RepublicanRep. Patrick McHenry [R-N.C.], stated the bill "will hurt small businesses, increase risk to the financial system, and drive up the cost of credit for all borrowers."  Excerpts from Representative McHenry's speech can be found here

What happens next? 

Now that the house has passed the bill, it's off to the Senate. Whether it will have any traction there remains to be seen. Several accounts receivable industry groups continue to voice their opposition to the Bill.  We will keep you updated with any developments. 

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