Comprehensive Debt Collection Improvement Act

IIB 117TH CONGRESS 1ST SESSION H. R. 2547 IN THE SENATE OF THE UNITED STATES MAY 17, 2021 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To expand and enhance consumer, student, servicemember, and small business protections with respect to debt col- lection practices, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 2 HR 2547 RFS SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 1 (a) SHORT TITLE.—This Act may be cited as the 2 ‘‘Comprehensive Debt Collection Improvement Act’’. 3 (b) TABLE OF CONTENTS.—The table of contents for 4 this Act is as follows: 5 Sec. 1. Short title; table of contents. TITLE I—SMALL BUSINESS LENDING FAIRNESS ACT Sec. 101. Short title. Sec. 102. Obligor transactions. Sec. 103. Enforcement of security interests. TITLE II —FAIR DEBT COLLECTION PRACTICES FOR SERVICEMEMBERS ACT Sec. 201. Short title. Sec. 202. Enhanced protection against debt collector harassment of servicemembers. Sec. 203. GAO study and report. TITLE III—PRIVATE LOAN DISABILITY DISCHARGE ACT Sec. 301. Short title. Sec. 302. Protections for obligors and cosigners in case of death or total and permanent disability. TITLE IV—CONSUMER PROTECTION FOR MEDICAL DEBT COLLECTIONS ACT Sec. 401. Short title. Sec. 402. Amendments to the Fair Debt Collection Practices Act. Sec. 403. Prohibition on consumer reporting agencies reporting certain medical debt. Sec. 404. Requirements for furnishers of medical debt information. TITLE V—ENDING DEBT COLLECTION HARASSMENT ACT Sec. 501. Short title. Sec. 502. Consumer protections relating to debt collection practices. TITLE VI—STOP DEBT COLLECTION ABUSE ACT Sec. 601. Short title. Sec. 602. Definitions. Sec. 603. Debt collection practices for debt collectors hired by Federal agencies. Sec. 604. Unfair practices. Sec. 605. GAO study and report. TITLE VII—DEBT COLLECTION PRACTICES HARMONIZATION ACT Sec. 701. Short title. Sec. 702. Award of damages. VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 3 HR 2547 RFS Sec. 703. Prohibition on the referral of emergency individual assistance debt. TITLE VIII—NON-JUDICIAL FORECLOSURE DEBT COLLECTION CLARIFICATION ACT Sec. 801. Short title. Sec. 802. Enforcement of security interests. TITLE IX—SECURING CONSUMERS AGAINST MISREPRESENTED DEBT ACT Sec. 901. Short title. Sec. 902. Legal actions by debt collectors. TITLE X—TEMPORARY RELIEF FOR PRIVATE STUDENT LOAN BORROWERS Sec. 1001. Temporary relief for private student loan borrowers. TITLE XI—REPORTS Sec. 1101. Report on COVID–19 pandemic debt collection practices. TITLE XII—FAIR DEBT COLLECTION IMPROVEMENT ACT Sec. 1201. Short title. Sec. 1202. Prohibition on collecting time-barred debt. TITLE XIII—CONSUMER BILL OF RIGHTS Sec. 1301. Consumer bill of rights against abusive debt collection practices. TITLE XIV—REPORT ON EXPERIENCES OF DELINQUENT BORROWERS OF PRIVATE EDUCATION LOANS Sec. 1401. Report on experiences of delinquent student loan borrowers. TITLE XV—REPORTS Sec. 1501. Report on use of electronic and telephone communications in the debt collection industry. TITLE XVI—REPORTS Sec. 1601. Report on debt collection practices and racial disparities. TITLE XVII—MISCELLANEOUS PROVISIONS Sec. 1701. Discretionary surplus funds. Sec. 1702. Effective date. TITLE XVIII—RELEASE OF COSIGNERS ON PRIVATE STUDENT LOANS ON DEATH OF BORROWER Sec. 1801. Short title. Sec. 1802. Applicability of certain amendments to the Truth in Lending Act. VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6211 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 4 HR 2547 RFS TITLE I—SMALL BUSINESS 1 LENDING FAIRNESS ACT 2 SEC. 101. SHORT TITLE. 3 This title may be cited as the ‘‘Small Business Lend- 4 ing Fairness Act’’. 5 SEC. 102. OBLIGOR TRANSACTIONS. 6 (a) IN GENERAL.—Chapter 2 of the Truth in Lend- 7 ing Act (15 U.S.C. 1631 et seq.) is amended by adding 8 at the end the following: 9 ‘‘§ 140B. Unfair credit practices 10 ‘‘(a) IN GENERAL.—In connection with the extension 11 of credit or creation of debt in or affecting commerce, as 12 defined in section 4 of the Federal Trade Commission Act 13 (15 U.S.C. 44), including any advance of funds or sale 14 or assignment of future income or receivables that may 15 or may not be credit, no person may directly or indirectly 16 take or receive from another person or seek to enforce an 17 obligation that constitutes or contains a cognovit or con- 18 fession of judgment (for purposes other than executory 19 process in the State of Louisiana), warrant of attorney, 20 or other waiver of the right to notice and the opportunity 21 to be heard in the event of suit or process thereon. 22 ‘‘(b) EXEMPTION.—The exemptions described in sec- 23 tion 104 shall not apply to this section.’’. 24 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 25 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 5 HR 2547 RFS (1) Section 130 of the Truth in Lending Act 1 (15 U.S.C. 1640) is amended by adding at the end 2 the following: 3 ‘‘(m) CREDITOR.—In this section, the term ‘creditor’ 4 refers to any person charged with compliance that is not 5 the obligor.’’. 6 (2) The table of sections in chapter 2 of the 7 Truth in Lending Act (15 U.S.C. 1631 et seq.) is 8 amended by adding at the end the following: 9 ‘‘140B. Unfair credit practices.’’. SEC. 103. ENFORCEMENT OF SECURITY INTERESTS. 10 Section 103 of the Truth in Lending Act (15 U.S.C. 11 1602) is amended by adding at the end the following: 12 ‘‘(ff) The term ‘debt’ means any obligation of a per- 13 son to pay to another person money— 14 ‘‘(1) that includes the right of the person pro- 15 viding the money to a legal or an equitable remedy 16 for breach of performance if the breach gives rise to 17 a right to payment; and 18 ‘‘(2) regardless of whether the obligation or 19 right to a remedy described in paragraph (1) is ab- 20 solute or contingent, has been reduced to judgment, 21 is fixed, matured, unmatured, disputed, undisputed, 22 recourse, nonrecourse, secured, or unsecured’’. 23 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 6 HR 2547 RFS TITLE II—FAIR DEBT COLLEC- 1 TION PRACTICES FOR 2 SERVICEMEMBERS ACT 3 SEC. 201. SHORT TITLE. 4 This title may be cited as the ‘‘Fair Debt Collection 5 Practices for Servicemembers Act’’. 6 SEC. 202. ENHANCED PROTECTION AGAINST DEBT COL- 7 LECTOR HARASSMENT OF 8 SERVICEMEMBERS. 9 (a) COMMUNICATION IN CONNECTION WITH DEBT 10 COLLECTION.—Section 805 of the Fair Debt Collection 11 Practices Act (15 U.S.C. 1692c) is amended by adding 12 at the end the following: 13 ‘‘(e) COMMUNICATIONS CONCERNING SERVICEMEM- 14 BER DEBTS.— 15 ‘‘(1) DEFINITION.—In this subsection, the term 16 ‘covered member’ means— 17 ‘‘(A) a covered member or a dependent as 18 defined in section 987(i) of title 10, United 19 States Code; and 20 ‘‘(B)(i) an individual who was separated, 21 discharged, or released from duty described in 22 such section 987(i)(1), but only during the 365- 23 day period beginning on the date of separation, 24 discharge, or release; or 25 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 7 HR 2547 RFS ‘‘(ii) a person, with respect to an individual 1 described in clause (i), described in subpara- 2 graph (A), (D), (E), or (I) of section 1072(2) 3 of title 10, United States Code. 4 ‘‘(2) PROHIBITIONS.—A debt collector may not, 5 in connection with the collection of any debt of a 6 covered member— 7 ‘‘(A) threaten to have the covered member 8 reduced in rank; 9 ‘‘(B) threaten to have the covered mem- 10 ber’s security clearance revoked; or 11 ‘‘(C) threaten to have the covered member 12 prosecuted under chapter 47 of title 10, United 13 States Code (the Uniform Code of Military Jus- 14 tice).’’. 15 (b) UNFAIR PRACTICES.—Section 808 of the Fair 16 Debt Collection Practices Act (15 U.S.C. 1692f) is amend- 17 ed by adding at the end the following: 18 ‘‘(9) The representation to any covered member 19 (as defined under section 805(e)(1)) that failure to 20 cooperate with a debt collector will result in— 21 ‘‘(A) a reduction in rank of the covered 22 member; 23 ‘‘(B) a revocation of the covered member’s 24 security clearance; or 25 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 8 HR 2547 RFS ‘‘(C) prosecution under chapter 47 of title 1 10, United States Code (the Uniform Code of 2 Military Justice).’’. 3 SEC. 203. GAO STUDY AND REPORT. 4 (a) STUDY.—The Comptroller General of the United 5 States shall conduct a study on the impact of debt collec- 6 tion on covered members (as defined under section 7 805(e)(1) of the Fair Debt Collection Practices Act, as 8 added by section 202), which shall— 9 (1) identify types of false, deceptive, misleading, 10 unfair, abusive, and harassing debt collection prac- 11 tices experienced by covered members and make rec- 12 ommendations to eliminate these practices; 13 (2) identify collection practices of creditors and 14 debt collectors experienced by covered members; 15 (3) discuss the effect of these practices on mili- 16 tary readiness; and 17 (4) discuss any national security implications, 18 including the extent to which covered members with 19 security clearances would be impacted by uncollected 20 debt. 21 (b) REPORT.—Not later than 1 year after the date 22 of enactment of this Act, the Comptroller General of the 23 United States shall submit to Congress a report on the 24 completed study required under subsection (a). 25 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 9 HR 2547 RFS TITLE III—PRIVATE LOAN 1 DISABILITY DISCHARGE ACT 2 SEC. 301. SHORT TITLE. 3 This title may be cited as the ‘‘Private Loan Dis- 4 ability Discharge Act of 2021’’. 5 SEC. 302. PROTECTIONS FOR OBLIGORS AND COSIGNERS IN 6 CASE OF DEATH OR TOTAL AND PERMANENT 7 DISABILITY. 8 (a) IN GENERAL.—Section 140(g) of the Truth in 9 Lending Act (15 U.S.C. 1650(g)) is amended— 10 (1) in paragraph (2)— 11 (A) in the heading, by striking ‘‘IN CASE 12 OF DEATH OF BORROWER’’; 13 (B) in subparagraph (A), by inserting after 14 ‘‘of the death’’, the following: ‘‘or total and per- 15 manent disability’’; and 16 (C) in subparagraph (C), by inserting after 17 ‘‘of the death’’, the following: ‘‘or total and per- 18 manent disability’’; and 19 (2) by adding at the end the following: 20 ‘‘(3) DISCHARGE IN CASE OF DEATH OR TOTAL 21 AND PERMANENT DISABILITY OF BORROWER.—The 22 holder of a private education loan shall, when noti- 23 fied of the death or total and permanent disability 24 of a student obligor (and any cosigner), discharge 25 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 10 HR 2547 RFS the liability of the student obligor on the loan and 1 may not, after such notification— 2 ‘‘(A) attempt to collect on the outstanding 3 liability of the student obligor; and 4 ‘‘(B) in the case of total and permanent 5 disability, monitor the disability status of the 6 student obligor at any point after the date of 7 discharge. 8 ‘‘(4) PRIVATE DISCHARGE IN CASES OF CER- 9 TAIN DISCHARGE FOR DEATH OR DISABILITY.—The 10 holder of a private education loan shall, when noti- 11 fied of the discharge of liability of a student obligor 12 on a loan described under section 108(f)(5)(A) of 13 the Internal Revenue Code of 1986, discharge any li- 14 ability of the student obligor (and any cosigner) on 15 any private education loan which the private edu- 16 cation loan holder holds and may not, after such no- 17 tification— 18 ‘‘(A) attempt to collect on the outstanding 19 liability of the student obligor; and 20 ‘‘(B) in the case of total and permanent 21 disability, monitor the disability status of the 22 student obligor at any point after the date of 23 discharge. 24 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 11 HR 2547 RFS ‘‘(5) TOTAL AND PERMANENT DISABILITY DE- 1 FINED.—For the purposes of this subsection and 2 with respect to an individual, the term ‘total and 3 permanent disability’ means the individual is totally 4 and permanently disabled, as such term is defined in 5 section 685.102(b) of title 34, Code of Federal Reg- 6 ulations.’’. 7 (b) RULEMAKING.—The Director of the Bureau of 8 Consumer Financial Protection may issue rules to imple- 9 ment the amendments made by subsection (a) as the Di- 10 rector determines appropriate. 11 TITLE IV—CONSUMER PROTEC- 12 TION FOR MEDICAL DEBT 13 COLLECTIONS ACT 14 SEC. 401. SHORT TITLE. 15 This title may be cited as the ‘‘Consumer Protection 16 for Medical Debt Collections Act’’. 17 SEC. 402. AMENDMENTS TO THE FAIR DEBT COLLECTION 18 PRACTICES ACT. 19 (a) DEFINITION.—Section 803 of the Fair Debt Col- 20 lection Practices Act (15 U.S.C. 1692a) is amended by 21 adding at the end the following: 22 ‘‘(9) The term ‘medical debt’ means a debt aris- 23 ing from the receipt of medical services, products, or 24 devices.’’. 25 VerDate Sep 11 2014 22:44 May 17, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2547.RFS H2547 kjohnson on DSK79L0C42PROD with BILLS 12 HR 2547 RFS (b) UNFAIR PRACTICES.—Section 808 of the Fair 1 Debt Collection Practices Act (15 U.S.C. 1692f), as 2 amended by section 202(b), is amended by adding at the 3 end the following: 4 ‘‘(10) Engaging in activities to collect or at- 5 tempting to collect a medical debt before the end of 6 the 2-year period beginning on the date that the 7 first payment with respect to such medical debt is 8 due.’’. 9 SEC. 403. PROHIBITION ON CONSUMER REPORTING AGEN- 10 CIES REPORTING CERTAIN MEDICAL DEBT. 11 (a) DEFINITION.—Section 603 of the Fair Credit Re- 12 porting Act (15 U.S.C. 1681a) is amended by adding at 13 the end the following: 14 ‘‘(bb) MEDICAL DEBT.—The term ‘medical debt’ 15 means a debt arising from the receipt of medical services, 16 products, [Text truncated for display. Full text available on Congress.gov.]