As we work to provide the best possible debt collection services to your clients, it’s imperative to stay abreast of the latest debt collection legislation. H.R. 2547, also known as the Comprehensive Debt Collection Improvement Act (CDCIA), is one of the latest pieces of legislation poised to shape the relationship between debtors, creditors, and debt collectors. In this article, we’ll give you the rundown on this new bill and how it could influence your debt collection processes down the line.
What’s the Comprehensive Debt Collection Improvement Act (CDCIA)?
For anyone who is completely new to the legislation, the Comprehensive Debt Collection Improvement Act is a recently introduced bill that passed the House of Representatives on May 13, 2021. It was pioneered by Maxine Waters, Chairwoman of the House Committee on Financial Services.
The CDCIA, as passed by the House, covers various areas of debt collection and is composed of the following acts:
1. Ending Debt Collection Harassment Act of 2021
2. Private Loan Disability Discharge Act of 2021
3. Ryan Frascone Memorial Student Loan Relief Act of 2021
4. Fair Debt Collection Improvement Act
5. Consumer Protection for Medical Debt Collections Act
6. Debt Collection Practices Harmonization Act
7. Securing Consumers Against Misrepresented Debt Act of 2021
8. Fair Debt Collection Practices for Servicemembers Act
9. Non-Judicial Foreclosure Debt Collection Clarification Act
10. SCAM Debt Act
11. Small Business Lending Fairness Act
12. Stop Debt Collection Abuse Act of 2021
Though the act is very comprehensive, it focuses intently on consumer protection (in the areas of foreclosure, medical debt, and college debt) and debt collector restrictions to ensure a more dignified debt collection procedure from start to finish.
CDCIA and Other Regulations
Some think that the CDCIA is associated with the recently approved Regulation F law or the Consumer Financial Protection Bureau (CFPB), but it is not. Rather, the CDCIA acts as an extension, and sometimes an amendment, to the Fair Debt Collection Practices Act (FDCPA), the primary law governing consumer debt collection practices.
Provisions of H.R. 2547
Now that you know a bit about the legislation, let’s dig deeper and explore specific provisions in this new bill.
Debt Collector Restrictions
H.R. 2547 sets limitations regarding how debt collectors can reach out to debtors electronically without their permission. Also, before taking legal action to collect a debt, debt collectors must notify the debtor beforehand.
The CDCIA puts considerable emphasis on protecting consumers during the debt collection process. It prohibits consumer reporting agencies from including debt-related information for necessary medical procedures on consumer credit reports. There are also more specific rules regarding the reporting of other types of medical debt. Regarding student loans, the CDCIA extends consumer protections for federal student loans to private student loans. Not only that, but creditors must discharge a debt in the event that a student becomes completely and permanently disabled.
COVID-19 Private Student Loans
The H.R. 2547 bill also considers the effect that the pandemic has had on students’ financial state. It prohibits consumer reporting agencies from reporting derogatory information about private student loans in credit reports.
Many other rules make up the H.R. 2547 legislation, but they are too lengthy to cover in their entirety here. To see the full legislation word-for-word, read it here on Congress.gov.
Learn More About the Legislation
If you’re wondering whether you should dive head-first into the CDCIA, there’s no need to do so at this point. It will take some time for the bill to be fully approved and signed into law. The act still has to go through the Senate, undergo necessary revisions and go through one last round of voting in the Senate and the House. If the bill is accepted, it will then be reviewed by the president and approved or vetoed. So, there shouldn’t be any rush to make any changes.
At the same time, getting familiar with the legislation can be helpful. If the bill passes, debt collectors may end up scrambling to learn the new regulations and become compliant.
If you want to know more about the legislation, reading through it line by line is not your only option. You can explore resources like InsideArm.com and Congress.gov for information in simpler terms. Whatever you do, be sure to keep an eye out for news about H.R. 2547 so that you’ll be ready to take action should it become law.