Stop Debt Collection Abuse Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 2572 To amend the Fair Debt Collection Practices Act to restrict the debt collection practices of certain debt collectors. IN THE HOUSE OF REPRESENTATIVES APRIL 15, 2021 Mr. CLEAVER introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Fair Debt Collection Practices Act to restrict the debt collection practices of certain debt collectors. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Stop Debt Collection 4 Abuse Act of 2021’’. 5 SEC. 2. DEFINITIONS. 6 Section 803 of the Fair Debt Collection Practices Act 7 (15 U.S.C. 1692a) is amended— 8 VerDate Sep 11 2014 09:04 May 28, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2572.IH H2572 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2572 IH (1) in paragraph (4), by striking ‘‘facilitating 1 collection of such debt for another’’ and inserting 2 ‘‘collection of such debt’’; 3 (2) by amending paragraph (5) to read as fol- 4 lows: 5 ‘‘(5) The term ‘debt’ means— 6 ‘‘(A) any obligation or alleged obligation of 7 a consumer to pay money arising out of a 8 transaction in which the money, property, in- 9 surance, or services which are the subject of the 10 transaction are primarily for personal, family, 11 or household purposes, whether or not such ob- 12 ligation has been reduced to judgment; or 13 ‘‘(B) any obligation or alleged obligation of 14 a consumer— 15 ‘‘(i) to pay a loan, an overpayment, a 16 fine, a penalty, a fee, or other money cur- 17 rently or originally owed to a Federal 18 agency; and 19 ‘‘(ii) that is not less than 180 days 20 past due.’’; and 21 (3) in paragraph (6)— 22 (A) by striking the first sentence and in- 23 serting the following: ‘‘The term ‘debt collector’ 24 means any person who uses any instrumentality 25 VerDate Sep 11 2014 09:04 May 28, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2572.IH H2572 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2572 IH of interstate commerce or the mails in any busi- 1 ness the principal purpose of which is the col- 2 lection of any debts; who regularly collects or 3 attempts to collect, directly or indirectly, by the 4 person’s own means or by hiring another debt 5 collector, debts owed or due or asserted to be 6 owed or due another or that have been obtained 7 by assignment or transfer from another; or who 8 regularly collects debts currently or originally 9 owed or allegedly owed to a Federal agency.’’; 10 and 11 (B) in subparagraph (F), by inserting ‘‘or 12 that has been obtained by assignment or trans- 13 fer from another’’ after ‘‘owed or due another’’. 14 SEC. 3. DEBT COLLECTION PRACTICES FOR DEBT COLLEC- 15 TORS HIRED BY GOVERNMENT AGENCIES. 16 (a) IN GENERAL.—The Fair Debt Collection Prac- 17 tices Act (15 U.S.C. 1692 et seq.) is amended by inserting 18 after section 812 (15 U.S.C. 1692j) the following: 19 ‘‘§ 812A. Debt collection practices for debt collectors 20 hired by Federal agencies 21 ‘‘(a) LIMITATION ON TIME TO TURN DEBT OVER TO 22 DEBT COLLECTOR.—A Federal agency that is a creditor 23 may sell or transfer a debt described in section 803(5)(B) 24 to a debt collector not earlier than 90 days after the date 25 VerDate Sep 11 2014 09:04 May 28, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2572.IH H2572 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2572 IH on which the obligation or alleged obligation becomes de- 1 linquent or defaults. 2 ‘‘(b) REQUIRED NOTICE.— 3 ‘‘(1) IN GENERAL.—Before transferring or sell- 4 ing a debt described in section 803(5)(B) to a debt 5 collector or contracting with a debt collector to col- 6 lect such a debt, a Federal agency shall notify the 7 consumer not fewer than 3 times that the Federal 8 agency will take such action. 9 ‘‘(2) FREQUENCY OF NOTIFICATIONS.—The 10 second and third notifications described in para- 11 graph (1) shall be made not less than 30 days after 12 the date on which the previous notification is 13 made.’’. 14 (b) CLERICAL AMENDMENT.—The table of contents 15 for the Fair Debt Collection Practices Act is amended by 16 inserting after the item relating to section 812 the fol- 17 lowing: 18 ‘‘812A. Debt collection practices for debt collectors hired by Federal agencies.’’. SEC. 4. UNFAIR PRACTICES. 19 Section 808 of the Fair Debt Collection Practices Act 20 (15 U.S.C. 1692f) is amended by striking paragraph (1) 21 and inserting the following: 22 ‘‘(1) The collection of any amount (including 23 any interest, fee, charge, or expense incidental to the 24 principal obligation) unless— 25 VerDate Sep 11 2014 09:04 May 28, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2572.IH H2572 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2572 IH ‘‘(A) such amount is expressly authorized 1 by the agreement creating the debt or permitted 2 by law; and 3 ‘‘(B) in the case of any amount charged by 4 a debt collector collecting a debt described in 5 section 803(5)(B), such amount is— 6 ‘‘(i) reasonable in relation to the ac- 7 tual costs of the collection; 8 ‘‘(ii) authorized by a contract between 9 the debt collector and the Federal agency; 10 and 11 ‘‘(iii) not greater than 10 percent of 12 the amount collected by the debt col- 13 lector.’’. 14 SEC. 5. GAO STUDY AND REPORT. 15 (a) STUDY.—The Comptroller General of the United 16 States shall commence a study on the use of debt collec- 17 tors by State and local government agencies, including— 18 (1) the powers given to the debt collectors by 19 Federal, State, and local government agencies; 20 (2) the contracting process that allows a Fed- 21 eral, State, or local government agency to award 22 debt collection to a certain company, including the 23 selection process; 24 VerDate Sep 11 2014 09:04 May 28, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2572.IH H2572 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2572 IH (3) any fees charged to debtors in addition to 1 principal and interest on the outstanding debt; 2 (4) how the fees described in paragraph (3) 3 vary from State to State; 4 (5) consumer protection at the State level that 5 offer recourse to those whom debts have been wrong- 6 fully attributed; 7 (6) the revenues received by debt collectors 8 from Federal, State, and local government agencies; 9 (7) the amount of any revenue sharing agree- 10 ments between debt collectors and Federal, State, 11 and local government agencies; 12 (8) the difference in debt collection procedures 13 across geographic regions, including the extent to 14 which debt collectors pursue court judgments to col- 15 lect debts; and 16 (9) any legal immunity or other protections 17 given to the debt collectors hired by State and local 18 government agencies, including whether the debt col- 19 lectors are subject to the Fair Debt Collection Prac- 20 tices Act (15 U.S.C. 1692 et seq.). 21 (b) REPORT.—Not later than one year after the date 22 of enactment of this Act, the Comptroller General of the 23 VerDate Sep 11 2014 09:04 May 28, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2572.IH H2572 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2572 IH United States shall submit to Congress a report on the 1 completed study required under subsection (a). 2 Æ VerDate Sep 11 2014 09:04 May 28, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H2572.IH H2572 kjohnson on DSK79L0C42PROD with BILLS