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H.R. 2547: Comprehensive Debt Collection Improvement Act


The text of the bill below is as of May 13, 2021 (Passed the House).


IB

117th CONGRESS

1st Session

H. R. 2547

IN THE HOUSE OF REPRESENTATIVES

AN ACT

To expand and enhance consumer, student, servicemember, and small business protections with respect to debt collection practices, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Comprehensive Debt Collection Improvement Act.

(b)

Table of contents

The table of contents for this Act is as follows:

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.

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.

I

Small Business Lending Fairness Act

101.

Short title

This title may be cited as the Small Business Lending Fairness Act.

102.

Obligor transactions

(a)

In general

Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by adding at the end the following:

140B.

Unfair credit practices

(a)

In general

In connection with the extension of credit or creation of debt in or affecting commerce, as defined in section 4 of the Federal Trade Commission Act (15 U.S.C. 44), including any advance of funds or sale or assignment of future income or receivables that may or may not be credit, no person may directly or indirectly take or receive from another person or seek to enforce an obligation that constitutes or contains a cognovit or confession of judgment (for purposes other than executory process in the State of Louisiana), warrant of attorney, or other waiver of the right to notice and the opportunity to be heard in the event of suit or process thereon.

(b)

Exemption

The exemptions described in section 104 shall not apply to this section.

.

(b)

Technical and conforming amendments

(1)

Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended by adding at the end the following:

(m)

Creditor

In this section, the term creditor refers to any person charged with compliance that is not the obligor.

.

(2)

The table of sections in chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by adding at the end the following:

140B. Unfair credit practices.

.

103.

Enforcement of security interests

Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended by adding at the end the following:

(ff)

The term ‘debt’ means any obligation of a person to pay to another person money—

(1)

that includes the right of the person providing the money to a legal or an equitable remedy for breach of performance if the breach gives rise to a right to payment; and

(2)

regardless of whether the obligation or right to a remedy described in paragraph (1) is absolute or contingent, has been reduced to judgment, is fixed, matured, unmatured, disputed, undisputed, recourse, nonrecourse, secured, or unsecured

.

II

Fair Debt Collection Practices for Servicemembers Act

201.

Short title

This title may be cited as the Fair Debt Collection Practices for Servicemembers Act.

202.

Enhanced protection against debt collector harassment of servicemembers

(a)

Communication in connection with debt collection

Section 805 of the Fair Debt Collection Practices Act (15 U.S.C. 1692c) is amended by adding at the end the following:

(e)

Communications concerning servicemember debts

(1)

Definition

In this subsection, the term covered member means—

(A)

a covered member or a dependent as defined in section 987(i) of title 10, United States Code; and

(B)
(i)

an individual who was separated, discharged, or released from duty described in such section 987(i)(1), but only during the 365-day period beginning on the date of separation, discharge, or release; or

(ii)

a person, with respect to an individual described in clause (i), described in subparagraph (A), (D), (E), or (I) of section 1072(2) of title 10, United States Code.

(2)

Prohibitions

A debt collector may not, in connection with the collection of any debt of a covered member—

(A)

threaten to have the covered member reduced in rank;

(B)

threaten to have the covered member’s security clearance revoked; or

(C)

threaten to have the covered member prosecuted under chapter 47 of title 10, United States Code (the Uniform Code of Military Justice).

.

(b)

Unfair practices

Section 808 of the Fair Debt Collection Practices Act (15 U.S.C. 1692f) is amended by adding at the end the following:

(9)

The representation to any covered member (as defined under section 805(e)(1)) that failure to cooperate with a debt collector will result in—

(A)

a reduction in rank of the covered member;

(B)

a revocation of the covered member’s security clearance; or

(C)

prosecution under chapter 47 of title 10, United States Code (the Uniform Code of Military Justice).

.

203.

GAO study and report

(a)

Study

The Comptroller General of the United States shall conduct a study on the impact of debt collection on covered members (as defined under section 805(e)(1) of the Fair Debt Collection Practices Act, as added by section 202), which shall—

(1)

identify types of false, deceptive, misleading, unfair, abusive, and harassing debt collection practices experienced by covered members and make recommendations to eliminate these practices;

(2)

identify collection practices of creditors and debt collectors experienced by covered members;

(3)

discuss the effect of these practices on military readiness; and

(4)

discuss any national security implications, including the extent to which covered members with security clearances would be impacted by uncollected debt.

(b)

Report

Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on the completed study required under subsection (a).

III

Private Loan Disability Discharge Act

301.

Short title

This title may be cited as the Private Loan Disability Discharge Act of 2021.

302.

Protections for obligors and cosigners in case of death or total and permanent disability

(a)

In general

Section 140(g) of the Truth in Lending Act (15 U.S.C. 1650(g)) is amended—

(1)

in paragraph (2)—

(A)

in the heading, by striking in case of death of borrower;

(B)

in subparagraph (A), by inserting after of the death, the following: or total and permanent disability; and

(C)

in subparagraph (C), by inserting after of the death, the following: or total and permanent disability; and

(2)

by adding at the end the following:

(3)

Discharge in case of death or total and permanent disability of borrower

The holder of a private education loan shall, when notified of the death or total and permanent disability of a student obligor (and any cosigner), discharge the liability of the student obligor on the loan and may not, after such notification—

(A)

attempt to collect on the outstanding liability of the student obligor; and

(B)

in the case of total and permanent disability, monitor the disability status of the student obligor at any point after the date of discharge.

(4)

Private discharge in cases of certain discharge for death or disability

The holder of a private education loan shall, when notified of the discharge of liability of a student obligor on a loan described under section 108(f)(5)(A) of the Internal Revenue Code of 1986, discharge any liability of the student obligor (and any cosigner) on any private education loan which the private education loan holder holds and may not, after such notification—

(A)

attempt to collect on the outstanding liability of the student obligor; and

(B)

in the case of total and permanent disability, monitor the disability status of the student obligor at any point after the date of discharge.

(5)

Total and permanent disability defined

For the purposes of this subsection and with respect to an individual, the term total and permanent disability means the individual is totally and permanently disabled, as such term is defined in section 685.102(b) of title 34, Code of Federal Regulations.

.

(b)

Rulemaking

The Director of the Bureau of Consumer Financial Protection may issue rules to implement the amendments made by subsection (a) as the Director determines appropriate.

IV

Consumer Protection for Medical Debt Collections Act

401.

Short title

This title may be cited as the Consumer Protection for Medical Debt Collections Act.

402.

Amendments to the Fair Debt Collection Practices Act

(a)

Definition

Section 803 of the Fair Debt Collection Practices Act (15 U.S.C. 1692a) is amended by adding at the end the following:

(9)

The term medical debt means a debt arising from the receipt of medical services, products, or devices.

.

(b)

Unfair practices

Section 808 of the Fair Debt Collection Practices Act (15 U.S.C. 1692f), as amended by section 202(b), is amended by adding at the end the following:

(10)

Engaging in activities to collect or attempting to collect a medical debt before the end of the 2-year period beginning on the date that the first payment with respect to such medical debt is due.

.

403.

Prohibition on consumer reporting agencies reporting certain medical debt

(a)

Definition

Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end the following:

(bb)

Medical debt

The term medical debt means a debt arising from the receipt of medical services, products, or devices.

(cc)

Medically necessary procedure

The term medically necessary procedure means—

(1)

health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine; and

(2)

health care to prevent illness or detect illness at an early stage, when treatment is likely to work best (including preventive services such as pap tests, flu shots, and screening mammograms).

.

(b)

In general

Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended by adding at the end the following new paragraphs:

(9)

Any information related to a debt arising from a medically necessary procedure.

(10)

Any information related to a medical debt, if the date on which such debt was placed for collection, charged to profit or loss, or subjected to any similar action antedates the report by less than 365 calendar days.

.

404.

Requirements for furnishers of medical debt information

(a)

Additional notice requirements for medical debt

Section 623 of the Fair Credit Reporting Act (15 U.S.C. 1681s–2) is amended by adding at the end the following:

(f)

Additional notice requirements for medical debt

Before furnishing information regarding a medical debt of a consumer to a consumer reporting agency, the person furnishing the information shall send a statement to the consumer that includes the following:

(1)

A notification that the medical debt—

(A)

may not be included on a consumer report made by a consumer reporting agency until the later of the date that is 365 days after—

(i)

the date on which the person sends the statement;

(ii)

with respect to the medical debt of a borrower demonstrating hardship, a date determined by the Director of the Bureau; or

(iii)

the date described under section 605(a)(10); and

(B)

may not ever be included on a consumer report made by a consumer reporting agency, if the medical debt arises from a medically necessary procedure.

(2)

A notification that, if the debt is settled or paid by the consumer or an insurance company before the end of the period described under paragraph (1)(A), the debt may not be reported to a consumer reporting agency.

(3)

A notification that the consumer may—

(A)

communicate with an insurance company to determine coverage for the debt; or

(B)

apply for financial assistance.

.

(b)

Furnishing of medical debt information

Section 623 of the Fair Credit Reporting Act (15 U.S.C. 1681s–2), as amended by subsection (a), is further amended by adding at the end the following:

(g)

Furnishing of medical debt information

(1)

Prohibition on reporting debt related to medically necessary procedures

No person shall furnish any information to a consumer reporting agency regarding a debt arising from a medically necessary procedure.

(2)

Treatment of other medical debt information

With respect to a medical debt not described under paragraph (1), no person shall furnish any information to a consumer reporting agency regarding such debt before the end of the 365-day period beginning on the later of—

(A)

the date on which the person sends the statement described under subsection (f) to the consumer;

(B)

with respect to the medical debt of a borrower demonstrating hardship, a date determined by the Director of the Bureau; or

(C)

the date described in section 605(a)(10).

(3)

Treatment of settled or paid medical debt

With respect to a medical debt not described under paragraph (1), no person shall furnish any information to a consumer reporting agency regarding such debt if the debt is settled or paid by the consumer or an insurance company before the end of the 365-day period described under paragraph (2).

(4)

Borrower demonstrating hardship defined

In this subsection, and with respect to a medical debt, the term borrower demonstrating hardship means a borrower or a class of borrowers who, as determined by the Director of the Bureau, is facing or has experienced extenuating life circumstances or events that result in severe financial or personal barriers such that the borrower or class of borrowers does not have the capacity to repay the medical debt.

.

V

Ending Debt Collection Harassment Act

501.

Short title

This title may be cited as the Ending Debt Collection Harassment Act of 2021.

502.

Consumer protections relating to debt collection practices

(a)

Reports on debt collection complaints and enforcement actions

(1)

Semi-annual report

Section 1016(c) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5496(c)) is amended—

(A)

in paragraph (8), by striking and at the end;

(B)

in paragraph (9), by striking the period at the end and inserting a semicolon; and

(C)

by adding at the end the following:

(10)

an analysis of the consumer complaints received by the Bureau with respect to debt collection, including a State-by-State breakdown of such complaints;

(11)

an analysis of the number of people unable to pay a debt because a debt collector is unable to accept a cash payment; and

(12)

a list of enforcement actions taken against debt collectors during the preceding year.

.

(2)

Annual report

Section 815(a) of the Fair Debt Collection Practices Act (15 U.S.C. 1692m(a)) is amended by adding at the end the following new sentence: Each such report shall also include an analysis of the impact of electronic communications by debt collectors on consumer experiences with debt collection, including a consideration of consumer complaints about the use of electronic communications in debt collection..

(b)

Limitation on debt collection rules

Section 1022 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5512) is amended by adding at the end the following:

(e)

Limitation on debt collection rules

The Director may not issue any rule with respect to debt collection that does not prohibit a debt collector to send unlimited email, text messages, and direct messages through social media to a consumer.

.

(c)

Protection of consumers from unlimited texts, emails, and social media messages used in debt collection

Section 806 of the Fair Debt Collection Practices Act (15 U.S.C. 1692d) is amended by adding at the end the following new paragraph:

(7)

Contacting the person electronically, including by email, text message, and direct message through social media, if—

(A)

the communication is required to be in writing and the person has not consented to receive the communication electronically in accordance with the requirements of the Electronic Signatures in Global and National Commerce Act;

(B)

the communication is governed by the Telephone Consumer Protection Act and the person has not consented to receive such communication in accordance with the requirements of such Act;

(C)

consent by the person to receive the communication was not provided directly to the debt collector;

(D)

consent by the person to receive the communication electronically has been withdrawn; or

(E)

the frequency of contact by the debt collector is greater than consented to by the person.

.

(d)

Protection Of Consumers From Social Media Communications In Debt Collection

Section 808(7) of the Fair Debt Collection Practices Act (15 U.S.C. 1692f) is amended by inserting the following before the period: or through a social media platform if the communication is viewable by the general public or the person’s social media contacts.

(e)

Ensuring consumers receive notice of debt collection protections

Section 809(a) of the Fair Debt Collection Practices Act (15 U.S.C. 1692g(a)) is amended in the matter preceding paragraph (1)—

(1)

by striking Within five days and all that follows through any debt, and inserting the following: Notice of debt; contents.—Within five days after the initial communication with a consumer in connection with the collection of any debt,; and

(2)

by striking , unless the following information is contained in the initial communication or the consumer has paid the debt,.

(f)

Improved limitations on debt collection rules

Section 814(d) of the Fair Debt Collection Practices Act (15 U.S.C. 1692l(d)) is amended by adding at the end the following:

Such rules—

(1)

may not allow a debt collector to send unlimited electronic communications to a consumer;

(2)

shall require debt collectors to obtain consent directly from consumers before contacting them using a method other than by postal mail or by telephone;

(3)

may not waive the requirements of the Electronic Signatures in Global and National Commerce Act (15 U.S.C. 7001 et seq.); and

(4)

shall allow consumers to opt out of any method of communication that the debt collector uses to communicate with consumers, including a method for which such consumer had given prior consent.

.

VI

Stop Debt Collection Abuse Act

601.

Short title

This title may be cited as the Stop Debt Collection Abuse Act of 2021.

602.

Definitions

Section 803 of the Fair Debt Collection Practices Act (15 U.S.C. 1692a) is amended—

(1)

in paragraph (4), by striking facilitating collection of such debt for another and inserting collection of such debt;

(2)

by amending paragraph (5) to read as follows:

(5)

The term debt means any obligation or alleged obligation of a consumer—

(A)

to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment;

(B)

to pay a loan, overpayment, fine, penalty, restitution, fee, or other money currently or originally owed to or guaranteed by a Federal or State government, including any courts or agencies; or

(C)

which is secured by real or personal property that is used or was obtained primarily for personal, family, or household purposes, where such property is subject to forfeiture or repossession upon nonpayment of the obligation or alleged obligation.

The enforcement of a debt described in subparagraph (C) is deemed to be a collection of a debt.

; and

(3)

in paragraph (6)—

(A)

by redesignating subparagraphs (A) through (F) as clauses (i) through (vi), respectively;

(B)

in clause (iii), as so redesignated, by inserting (not including an independent contractor) after any State;

(C)

by amending clause (vi), as so redesignated, to read as follows:

(vi)

any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity—

(I)

is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement;

(II)

concerns a debt which was originated by such person;

(III)

concerns a debt which was not in default at the time it was obtained by such person; or

(IV)

concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.

;

(D)

by striking the paragraph designation and the first and second sentences and inserting the following:

(6)
(A)

The term debt collector means—

(i)

any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts;

(ii)

any person who regularly collects or attempts to collect, directly or indirectly, by the person’s own means or by hiring another debt collector, debts owed or due or asserted to be owed or due another or that have been obtained by assignment or transfer from another;

(iii)

any person who regularly collects debts currently or originally owed or allegedly owed to a Federal or State agency or court; or

(iv)

notwithstanding subparagraph (B)(vi), any creditor who in the process of collecting debts of such creditor, uses another name that would indicate that a third person is collecting or attempting to collect such debts.

; and

(E)

in the fourth sentence, by striking The term does not include and inserting the following:

(B)

The term does not include

.

603.

Debt collection practices for debt collectors hired by Federal agencies

(a)

In general

The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) is amended by inserting after section 812 (15 U.S.C. 1692j) the following:

812A.

Debt collection practices for debt collectors hired by Federal agencies

(a)

Limitation on time To turn debt over to debt collector

A Federal agency that is a creditor may not sell or transfer a debt described in section 803(5)(B) to a debt collector earlier than 90 days after the date on which the obligation or alleged obligation becomes delinquent or defaults.

(b)

Required notice

(1)

In general

Before transferring or selling a debt described in section 803(5)(B) to a debt collector or contracting with a debt collector to collect such a debt, a Federal agency shall notify the consumer not fewer than 3 times that the Federal agency will take such action.

(2)

Frequency of notifications

The second and third notifications described in paragraph (1) shall be made not less than 30 days after the date on which the previous notification is made.

.

(b)

Clerical amendment

The table of contents for the Fair Debt Collection Practices Act is amended by inserting after the item relating to section 812 the following:

812A. Debt collection practices for debt collectors hired by Federal agencies.

.

604.

Unfair practices

Section 808 of the Fair Debt Collection Practices Act (15 U.S.C. 1692f) is amended by striking paragraph (1) and inserting the following:

(1)

The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless—

(A)

such amount is expressly authorized by the agreement creating the debt or permitted by law; and

(B)

in the case of any amount charged by a debt collector collecting a debt described in section 803(5)(B), such amount is—

(i)

reasonable in relation to the actual costs of the collection;

(ii)

authorized by a contract between the debt collector and the Federal or State government; and

(iii)

not greater than 10 percent of the amount collected by the debt collector.

.

605.

GAO study and report

(a)

Study

The Comptroller General of the United States shall commence a study on the use of debt collectors by Federal and State government agencies, including—

(1)

the powers given to the debt collectors by Federal and State government agencies;

(2)

the contracting process that allows a Federal or State government agency to award debt collection to a certain company, including the selection process;

(3)

any fees charged to debtors in addition to principal and interest on the outstanding debt;

(4)

how the fees described in paragraph (3) vary from State to State;

(5)

consumer protection at the Federal and State level that offer recourse to those whom debts have been wrongfully attributed;

(6)

the revenues received by debt collectors from Federal and State government agencies;

(7)

the amount of any revenue sharing agreements between debt collectors and Federal and State government agencies;

(8)

the difference in debt collection procedures across geographic regions, including the extent to which debt collectors pursue court judgments to collect debts;

(9)

information regarding the amount collected by Federal and State government agencies through debt collectors, including the total amount and the percentage of the amount referred to the debt collectors;

(10)

the full cost of outsourcing collection to debt collectors;

(11)

government agency oversight of debt collectors to ensure that the rights of a consumer (as defined in section 803(3) of the Fair Debt Collection Practices Act (15 U.S.C. 1692a(3))) are protected and that any debt relief and payment options legally available to consumers is effectively communicated and made available;

(12)

the extent to which Federal and State contracts with debt collectors reflect or omit effective measures to encourage debt collectors to align their practices with public policy concerns (including relief for consumers experiencing financial hardship) beyond maximizing debt collection;

(13)

the extent to which debt collectors induce payment through use or threat of adverse government actions, such as arrest warrants or suspension of licenses or vehicle registration; and

(14)

demographic data, including race and income information, regarding the individuals subject to private collection of debts owed to government entities.

(b)

Report

Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on the completed study required under subsection (a).

(c)

State defined

For the purposes of this section, the term State has the meaning given the term section 803 of the Fair Debt Collection Practices Act.

VII

Debt Collection Practices Harmonization Act

701.

Short title

This title may be cited as the Debt Collection Practices Harmonization Act.

702.

Award of damages

(a)

Additional damages indexed for inflation

(1)

In general

Section 813 of the Fair Debt Collection Practices Act (15 U.S.C. 1692k) is amended—

(A)

in subsection (a)(2)—

(i)

in subparagraph (A), by striking ; or and inserting the following: with respect to any one action taken by a debt collector in violation of this subchapter; or;

(ii)

in subparagraph (B)(ii), by striking or 1 per centum of the net worth of the debt collector; and and inserting the following: or 5 percent of the gross annual revenue of the debt collector; and;

(B)

in subsection (b), by inserting the maximum amount of statutory damages at the time of noncompliance, before the frequency each place it appears; and

(C)

by adding at the end the following:

(f)

Adjustment for inflation

(1)

Initial adjustment

Not later than 90 days after the date of the enactment of this subsection, the Bureau shall provide a percentage increase (rounded to the nearest multiple of $100 or $1,000, as applicable) in the amounts set forth in this section equal to the percentage by which—

(A)

the Consumer Price Index for All Urban Consumers (all items, United States city average) for the 12-month period ending on the June 30 preceding the date on which the percentage increase is provided, exceeds

(B)

the Consumer Price Index for the 12-month period preceding January 1, 1978.

(2)

Annual adjustments

With respect to any fiscal year beginning after the date of the increase provided under paragraph (1), the Bureau shall provide a percentage increase (rounded to the nearest multiple of $100 or $1,000, as applicable) in the amounts set forth in this section equal to the percentage by which—

(A)

the Consumer Price Index for All Urban Consumers (all items, United States city average) for the 12-month period ending on the June 30 preceding the beginning of the fiscal year for which the increase is made, exceeds

(B)

the Consumer Price Index for the 12-month period preceding the 12-month period described in subparagraph (A).

.

(2)

Applicability

The increases made under section 813(f) of the Fair Debt Collection Practices Act, as added by paragraph (1)(C) of this subsection, shall apply with respect to failures to comply with a provision of such Act (15 U.S.C. 1601 et seq.) occurring on or after the date of enactment of this section.

(b)

Injunctive relief

Section 813(d) of the Fair Debt Collection Practices Act (15 U.S.C. 1692k(d)) is amended by adding at the end the following: In a civil action alleging a violation of this title, the court may award appropriate relief, including injunctive relief..

703.

Prohibition on the referral of emergency individual assistance debt

Chapter 3 of title 31, United States Code, is amended—

(1)

in subchapter II, by adding at the end the following:

334.

Prohibition on the referral of emergency individual assistance debt

With respect to any assistance provided by the Federal Emergency Management Agency to an individual or household pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122 et seq.), if the Secretary of the Treasury seeks to recoup any amount of such assistance because of an overpayment, the Secretary may not contract with any debt collector as defined in section 803(6) of the Fair Debt Collection Practices Act (15 U.S.C. 1692a(6)) or other private party to collect such amounts, unless the overpayment occurred because of fraud or deceit and the recipient of such assistance knew or should have known about such fraud or deceit.

; and

(2)

in the table of contents for such chapter, by inserting after the item relating to section 333 the following:

334. Prohibition on the referral of emergency individual assistance debt.

.

VIII

Non-Judicial Foreclosure Debt Collection Clarification Act

801.

Short title

This title may be cited as the Non-Judicial Foreclosure Debt Collection Clarification Act.

802.

Enforcement of security interests

Section 803(6) of the Fair Debt Collection Practices Act (15 U.S.C. 1692a(6)) is further amended by striking For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests..

IX

Securing Consumers Against Misrepresented Debt Act

901.

Short title

This title may be cited as the Securing Consumers Against Misrepresented Debt Act of 2021 or the SCAM Debt Act.

902.

Legal actions by debt collectors

Section 811 of the Fair Debt Collections Practices Act (15 U.S.C. 1692i) is amended—

(1)

by redesignating subsection (b) as subsection (c); and

(2)

by inserting after subsection (a) the following new subsection:

(b)

Requirements for debt collectors

A debt collector that takes legal action to collect or attempt to collect a debt shall comply with the following requirements:

(1)

Provide the consumer written notice of the intent to take legal action, sent to the consumer’s last known address at least 30 days and not later than 60 days in advance of commencing the legal action, that shall include—

(A)

all methods that the consumer can use to contact the debt collector; and

(B)

all information contained in the notice required under section 809(a) (excluding the information described in paragraphs (3), (4), and (5) of such section), updated to ensure correctness.

(2)

In the initial pleading filed by a debt collector to commence a legal action to collect a debt, include—

(A)

all information contained in the notice required under section 809(a) (excluding the information described in paragraphs (3), (4), and (5) of such section), except any account numbers and any personally identifiable information, updated to ensure correctness;

(B)

the last four digits of the account number of the original debt;

(C)

admissible documentary evidence of—

(i)

the written agreement, contract, or instrument creating the debt, if any, or other documents showing that the consumer agreed to the agreement, contract, or instrument creating the debt;

(ii)

any terms and conditions relevant to the debt;

(iii)

that the consumer incurred the debt and the amount owed; and

(iv)

that there is a chain of title of the ownership of debt and the right to collect the debt, including documents showing the date of each transfer of ownership of the debt and the identity of each owner of the debt; and

(D)

a sworn affidavit stating—

(i)

that the applicable statute of limitations for collecting the debt has not expired and the date on which such statute of limitations expires; and

(ii)

that the debt collector personally reviewed all applicable records and documents relating to the debt to be collected.

.

X

Temporary relief for private student loan borrowers

1001.

Temporary relief for private student loan borrowers

(a)

In general

A servicer of a private education loan shall not report an adverse item of information relating to the nonpayment of a private education loan that occurred during the covered period.

(b)

Consumer reporting agencies

During the covered period, a consumer reporting agency—

(1)

may not make a consumer report containing adverse information relating to the nonpayment of a private education loan by a covered borrower; and

(2)

shall promptly remove, in a period of time as determined by the Director of the Consumer Financial Protection Bureau, from a consumer report any such adverse information reported during the covered period.

(c)

Implementation

The Director of the Consumer Financial Protection Bureau may issue guidance or rules to implement this section, including—

(1)

requiring any notifications and other requirements that may be necessary to carry out this section; and

(2)

ensuring a covered borrower is aware of their rights under this section relating to the exclusion or removal of any relevant adverse information the consumer report of the consumer.

(d)

Effective date

This section shall take effect 30 days after the date of the enactment of this Act.

(e)

Definitions

In this section:

(1)

Covered borrower

The term covered borrower means a borrower of a private education loan.

(2)

Covered period

The term covered period means the period beginning on March 13, 2020 (the date the President declared the emergency under section 501 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 4121 et seq.) relating to the Coronavirus Disease 2019 (COVID–19) pandemic) and ending on the date that is 30 days after the end of the incident period for such emergency.

(3)

Fair Credit Reporting Act definitions

The terms consumer report and consumer reporting agency have the meanings given, respectively, in section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a).

(4)

Private education loan

The term private education loan has the meaning given the term in section 140 of the Truth in Lending Act (15 U.S.C. 1650).

XI

Reports

1101.

Report on COVID–19 pandemic debt collection practices

(a)

In general

Not later than 6 months after the date of the enactment of this section, the Director of the Bureau of Consumer Financial Protection shall submit a report to Financial Services Committee of the House of Representatives and Banking Committee of the Senate that—

(1)

analyzes available data relating to consumer complaints about debt collection practices during the COVID–19 pandemic, including the collection of medical debt and the collection of debt from servicemembers;

(2)

lists all enforcement actions taken by the Bureau during the COVID–19 pandemic that related to debt collection; and

(3)

describes how the Bureau will use regulatory, supervisory and enforcement tools to combat predatory debt collection practices identified during the COVID–19 pandemic.

(b)

Additional required information

(1)

In general

The Director shall require each larger participant in the consumer debt collection market (as such term is defined in section 1090 of title 12 of the Code of Federal Regulations to provide to the Director information about any default judgements pursued by such larger participant through litigation during the COVID–19 pandemic.

(2)

Inclusion in report

The Director shall compile all information received from larger participants under paragraph (1) and shall include such information in the report required under subsection (a).

(c)

Definitions

In this section:

(1)

The term Director means the Director of the Bureau of Consumer Financial Protection.

(2)

The term Bureau means the Bureau of Consumer Financial Protection.

XII

Fair Debt Collection Improvement Act

1201.

Short title

This title may be cited as the Fair Debt Collection Improvement Act.

1202.

Prohibition on collecting time-barred debt

(a)

In general

The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) is amended by inserting after section 811 the following:

811A.

Prohibition on collecting time-barred debt

A debt collector may not collect, or attempt to collect, any debt of a consumer with respect to which the statute of limitations has expired.

.

(b)

Clerical amendment

The table of contents for the Fair Debt Collection Practices Act is amended by inserting after the item relating to section 811 the following:

811A. Prohibition on collecting time-barred debt.

.

XIII

Consumer Bill of Rights

1301.

Consumer bill of rights against abusive debt collection practices

(a)

In general

The Director shall, in consultation with relevant stakeholders and experts that specialize in consumer financial protection with respect to debt collection practices, maintain a webpage on the website of the Bureau that outlines consumer rights, protections, and remedies with respect to debt collection practices.

(b)

Accessibility

(1)

In general

The Director shall ensure that the webpage established pursuant to subsection (a) is easily accessible and understandable.

(2)

Languages

The Director may, as determined appropriate by the Director, make the website available in languages other than English.

(c)

Contents

The website established pursuant to subsection (a) may include—

(1)

a description of acceptable and unacceptable practices that debt collectors may engage in while attempting to collect debt; and

(2)

know your rights information that—

(A)

outlines actions a consumer may take if they are experiencing abusive or inappropriate debt collection practices;

(B)

provides resources to take action to prevent or stop abusive or inappropriate debt collection practices;

(C)

contact information and other available resources for a consumer to learn more to prevent or stop such abusive practices; and

(D)

any other information the Bureau deems appropriate to better inform consumers of their rights with respect to debt collection practices.

(d)

Definitions

In this section:

(1)

The term Director means the Director of the Bureau of Consumer Financial Protection.

(2)

The term Bureau means the Bureau of Consumer Financial Protection.

XIV

Report on experiences of delinquent borrowers of private education loans

1401.

Report on experiences of delinquent student loan borrowers

Not later than 18 months after the date of the enactment of this Act, the Director of the Bureau of Consumer Financial Protection Bureau shall carry out a study and submit to Congress a report on the consumer experiences and financial impacts of debt collection practices on delinquent borrowers of private education loans (as defined in section 140(a) of the Truth in Lending Act (15 U.S.C. 1650(a)) and such report shall include an analysis of—

(1)

the frequency and nature of private student lenders challenging undue hardship bankruptcy petitions made by borrowers of private education loans; and

(2)

whether private student lenders disproportionately challenge undue hardship petitions made by low-income or otherwise vulnerable borrowers of private education loans.

XV

Reports

1501.

Report on use of electronic and telephone communications in the debt collection industry

Not later than 12 months after the date of the enactment of this section, the Comptroller General of the United States shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate that—

(1)

analyzes trends and impacts associated with the use of electronic and telephone communications in the debt collection industry, including a study of the annoyance, abuse, and harassment of consumers by debt collectors, and methods for reducing the frequency of electronic and telephone communications by debt collectors to consumers; and

(2)

contains specific regulatory and legislative proposals to accomplish those goals.

XVI

Reports

1601.

Report on debt collection practices and racial disparities

Not later than 18 months after the date of the enactment of this section, the Director of the Bureau of Consumer Financial Protection shall submit a report to the Financial Services Committee of the House of Representatives and Banking Committee of the Senate that—

(1)

identifies and analyzes racial disparities relating to debt collection practices; and

(2)

provides administrative and legislative recommendations to address such disparities.

XVII

Miscellaneous Provisions

1701.

Discretionary surplus funds

(a)

In general

The dollar amount specified under section 7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is reduced by $2,900,000,000.

(b)

Effective date

The amendment made by subsection (a) shall take effect on September 30, 2031.

1702.

Effective date

Except as otherwise provided in this Act, this Act and the amendments made by this Act shall take effect on the date that is 180 days after the date of enactment of this Act.

XVIII

Release of cosigners on private student loans on death of borrower

1801.

Short title

This title may be cited as the Ryan Frascone Memorial Student Loan Relief Act of 2021.

1802.

Applicability of certain amendments to the Truth in Lending Act

(a)

In general

Effective on the date of enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115–174), section 601(b) of such Act is amended to read as follows:

(b)

Applicability

The amendments made by subsection (a) shall apply to private education loan agreements entered into before, on, or after the date of enactment of this Act.

.

(b)

Treasury loan purchase program

(1)

In general

The Secretary of the Treasury shall establish a program under which the Secretary shall purchase and retire outstanding private education loans—

(A)

where the borrower on such loan is deceased;

(B)

where there remains a cosigner on the loan;

(C)

that were entered into before the date that is 180 days after the date of enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act; and

(D)

only upon an application from a holder of such loan pursuant to paragraph (2) that demonstrates the holder has suffered financial injury as a result of the amendment made by subsection (a).

(2)

Application

The holder of a loan described under paragraph (1) may apply to the Secretary of the Treasury to have the Secretary purchase and retire such loan by submitting an application in such form and manner as the Secretary may require.

(3)

Authorization of appropriation

There is authorized to be appropriated to the Secretary of the Treasury $5,000,000 to carry out this subsection.

(4)

Truth in Lending Act terms

In this subsection, the terms cosigner and private education loan have the meaning given those terms, respectively, under section 140 of the Truth in Lending Act (15 U.S.C. 1650).

(c)

Severability

The provisions of this Act are severable. If any part of this Act is declared invalid or unconstitutional, that declaration shall not affect the part which remains.

Passed the House of Representatives May 13, 2021.

Cheryl L. Johnson,

Clerk.