Stop Debt Collection Abuse Act of 2019

IB Union Calendar No. 538 116TH CONGRESS 2D SESSION H. R. 4403 [Report No. 116–654] To amend the Fair Debt Collection Practices Act to restrict the debt collection practices of certain debt collectors. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 19, 2019 Mr. CLEAVER (for himself and Mr. HILL of Arkansas) introduced the following bill; which was referred to the Committee on Financial Services DECEMBER 15, 2020 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on September 19, 2019] VerDate Sep 11 2014 21:18 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H4403.RH H4403 2 •HR 4403 RH A BILL To amend the Fair Debt Collection Practices Act to restrict the debt collection practices of certain debt collectors. VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H4403.RH H4403 3 •HR 4403 RH 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 2019’’. 5 SEC. 2. DEFINITIONS. 6 Section 803 of the Fair Debt Collection Practices Act 7 (15 U.S.C. 1692a) is amended— 8 (1) in paragraph (4), by striking ‘‘facilitating 9 collection of such debt for another’’ and inserting ‘‘col- 10 lection of such debt’’; 11 (2) by amending paragraph (5) to read as fol- 12 lows: 13 ‘‘(5) The term ‘debt’ means— 14 ‘‘(A) any obligation or alleged obligation of 15 a consumer to pay money arising out of a trans- 16 action in which the money, property, insurance, 17 or services which are the subject of the trans- 18 action are primarily for personal, family, or 19 household purposes, whether or not such obliga- 20 tion has been reduced to judgment; or 21 ‘‘(B) any obligation or alleged obligation of 22 a consumer— 23 ‘‘(i) to pay a loan, an overpayment, a 24 fine, a penalty, a fee, or other money cur- 25 VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H4403.RH H4403 4 •HR 4403 RH rently or originally owed to a Federal agen- 1 cy; and 2 ‘‘(ii) that is not less than 180 days 3 past due.’’; and 4 (3) in paragraph (6)— 5 (A) by striking the first sentence and insert- 6 ing the following: ‘‘The term ‘debt collector’ 7 means any person who uses any instrumentality 8 of interstate commerce or the mails in any busi- 9 ness the principal purpose of which is the collec- 10 tion of any debts; who regularly collects or at- 11 tempts to collect, directly or indirectly, by the 12 person’s own means or by hiring another debt 13 collector, debts owed or due or asserted to be 14 owed or due another or that have been obtained 15 by assignment or transfer from another; or who 16 regularly collects debts currently or originally 17 owed or allegedly owed to a Federal agency.’’; 18 and 19 (B) in subparagraph (F), by inserting ‘‘or 20 that has been obtained by assignment or transfer 21 from another’’ after ‘‘owed or due another’’. 22 VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H4403.RH H4403 5 •HR 4403 RH SEC. 3. DEBT COLLECTION PRACTICES FOR DEBT COLLEC- 1 TORS HIRED BY GOVERNMENT AGENCIES. 2 (a) IN GENERAL.—The Fair Debt Collection Practices 3 Act (15 U.S.C. 1692 et seq.) is amended by inserting after 4 section 812 (15 U.S.C. 1692j) the following: 5 ‘‘§ 812A. Debt collection practices for debt collectors 6 hired by Federal agencies 7 ‘‘(a) LIMITATION ON TIME TO TURN DEBT OVER TO 8 DEBT COLLECTOR.—A Federal agency that is a creditor 9 may sell or transfer a debt described in section 803(5)(B) 10 to a debt collector not earlier than 90 days after the date 11 on which the obligation or alleged obligation becomes delin- 12 quent or defaults. 13 ‘‘(b) REQUIRED NOTICE.— 14 ‘‘(1) IN GENERAL.—Before transferring or selling 15 a debt described in section 803(5)(B) to a debt col- 16 lector or contracting with a debt collector to collect 17 such a debt, a Federal agency shall notify the con- 18 sumer not fewer than 3 times that the Federal agency 19 will take such action. 20 ‘‘(2) FREQUENCY OF NOTIFICATIONS.—The sec- 21 ond and third notifications described in paragraph 22 (1) shall be made not less than 30 days after the date 23 on which the previous notification is made.’’. 24 VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H4403.RH H4403 6 •HR 4403 RH (b) CLERICAL AMENDMENT.—The table of contents for 1 the Fair Debt Collection Practices Act is amended by insert- 2 ing after the item relating to section 812 the following: 3 ‘‘812A. Debt collection practices for debt collectors hired by Federal agencies.’’. SEC. 4. UNFAIR PRACTICES. 4 Section 808 of the Fair Debt Collection Practices Act 5 (15 U.S.C. 1692f) is amended by striking paragraph (1) 6 and inserting the following: 7 ‘‘(1) The collection of any amount (including 8 any interest, fee, charge, or expense incidental to the 9 principal obligation) unless— 10 ‘‘(A) such amount is expressly authorized by 11 the agreement creating the debt or permitted by 12 law; and 13 ‘‘(B) in the case of any amount charged by 14 a debt collector collecting a debt described in sec- 15 tion 803(5)(B), such amount is— 16 ‘‘(i) reasonable in relation to the ac- 17 tual costs of the collection; 18 ‘‘(ii) authorized by a contract between 19 the debt collector and the Federal agency; 20 and 21 ‘‘(iii) not greater than 10 percent of 22 the amount collected by the debt collector.’’. 23 VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H4403.RH H4403 7 •HR 4403 RH SEC. 5. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 1 AND REPORT. 2 (a) STUDY.—The Comptroller General of the United 3 States shall commence a study on the use of debt collectors 4 by State and local government agencies, including— 5 (1) the powers given to the debt collectors by 6 Federal, State, and local government agencies; 7 (2) the contracting process that allows a Federal, 8 State, or local government agency to award debt col- 9 lection to a certain company, including the selection 10 process; 11 (3) any fees charged to debtors in addition to 12 principal and interest on the outstanding debt; 13 (4) how the fees described in paragraph (3) vary 14 from State to State; 15 (5) consumer protection at the State level that 16 offer recourse to those whom debts have been wrong- 17 fully attributed; 18 (6) the revenues received by debt collectors from 19 Federal, State, and local government agencies; 20 (7) the amount of any revenue sharing agree- 21 ments between debt collectors and Federal, State, and 22 local government agencies; 23 (8) the difference in debt collection procedures 24 across geographic regions, including the extent to 25 VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H4403.RH H4403 8 •HR 4403 RH which debt collectors pursue court judgments to collect 1 debts; and 2 (9) any legal immunity or other protections 3 given to the debt collectors hired by State and local 4 government agencies, including whether the debt col- 5 lectors are subject to the Fair Debt Collection Prac- 6 tices Act (15 U.S.C. 1692 et seq.). 7 (b) REPORT.—Not later than one year after the date 8 of enactment of this Act, the Comptroller General of the 9 United States shall submit to Congress a report on the com- 10 pleted study required under subsection (a). 11 VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H4403.RH H4403 VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H4403.RH H4403 Union Calendar No. 538 116TH CONGRESS 2D SESSION H. R. 4403 [Report No. 116–654] A BILL To amend the Fair Debt Collection Practices Act to restrict the debt collection practices of certain debt collectors. DECEMBER 15, 2020 Reported with an amendment, committed to the Com- mittee of the Whole House on the State of the Union, and ordered to be printed VerDate Sep 11 2014 20:48 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6651 Sfmt 6651 E:\BILLS\H4403.RH H4403