House votes to protect servicemembers from debt collectors
New legislation aimed at protecting servicemembers from underhanded debt collection practices passed the U.S. House by a narrow, partisan majority.
The Comprehensive Debt Collection Improvement Act (H.R. 2547) prohibits debts collectors from threatening a servicemember with reducing their rank, revoking their security clearance, or prosecuting them under the Uniform Code of Military Justice.
“Many servicemembers who struggle to keep up with bills face harassment from debt collectors and these types of practices can drive consumers event further into debt or worse,” Second District Congresswoman Elaine Luria said. “More than one in four Americans have an item in collections listed on their credit report, and they should not be subject to mistreatment or harassment.”
The Comprehensive Debt Collection Act passed the House by a vote of 215-207.
Apparently, Republicans are just fine with servicemembers being harassed by debt collectors.
This at a time which has seen many consumers and small businesses struggle to keep up with their bills, through no fault of their own, while debt collectors have seen record profits.
Recent CFPB reporting reveals that its consumer complaint database received 82,700 consumer complaints regarding debt collection issues in 2020, a 10 percent increase from the previous year.
In addition to protecting servicemembers, the Comprehensive Debt Collection Improvement Act provides important protections for small businesses, students, and other consumers.
The legislation codifies protections that currently exist under a Federal Trade Commission regulation for consumer loans prohibiting the use of “confessions of judgment” that waive due process protections, and extends those protections to commercial loans to protect small and minority-owned businesses. It also requires private lenders who are notified that the federal government has discharged the federal student loans of a borrower to discharge the private student loans of that same borrower.
The bill also bars entities from collecting medical debt or reporting it to a consumer reporting agency without giving a consumer notice about their rights.
The tight House vote doesn’t bode well for how the act might fare in the Senate, where good legislation goes to die, often.
Story by Chris Graham