D.C. City Council Amends Emergency Debt Collection Bill

On August 3, 2021, the D.C. City Council unanimously approved an amended version of the pending D.C. emergency debt collection bill. If signed by the D.C. Mayor, the amended bill will become applicable on October 1, 2021.

The amendments address several of the more demanding aspects of the original bill, including the limitation on call volumes, itemization for credit cards and number of monthly statements required, initial communication requirements, proof of ownership requirements for lawsuits, damage awards, and the applicability date

Here is a quick run-down of the changes between the original bill and the amended bill:

Call Volume Limitation: the original bill limited calls to three calls per consumer within any seven-day span. While this limitation remains in the bill, the amendment clarifies that the limit of three calls does not apply to calls made at the consumer’s request.

Itemization Requirements/Monthly Statements: In addition to an itemized accounting, the original bill required debt collectors collecting credit card debt to send consumers twenty-four months’ worth of statements. The amendment clarifies that itemized accounting shall be measured from the charge-off balance and changes the monthly statement requirements to include only copies of the charge-off statement and most recent monthly statement showing a purchase, payment, or balance transfer.

Initial Communication: The original bill required debt collectors to provide numerous documents and information to the consumer within five days of the initial communication, whether or not the consumer requested them. Instead, the amended bill now requires the debt collector to include a notice in bold-face 12 point font in the initial communication that the consumer may request specific types of information and documents. The exact phrasing of the statement and the other information the debt collector must provide to the consumer is provided in the amended bill.

Proof of Ownership Requirements for Lawsuits: The original bill required debt collectors to include within any lawsuit to collect a debt an assignment or writing which showed the last four digits of the original account number and the debtor’s name associated with that number. Instead, per the amended bill, debt collectors must state (a) the date on which the debt was sold or assigned; (b) each previous owner and the date on which the debt was assigned; and (c) the amount due when the original creditor sold the account.

Damage Awards: The original bill stated that if a debt collector violated the requirements in the bill and the existing law, the debt collector “shall” be liable to the consumer for certain types of damages, and included language that damages were to be awarded per violation. The amended bill changes “shall” to “may” and removes the allowance of damages per violation.

Applicability Date: The amended bill states it will not be applicable until October 1, 2021.

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insideARM Perspective:  

The original bill was passed without a hearing or opportunity to comment and ultimately included requirements that would have been impossible for debt collectors to meet. The amendments to the bill should allow the D.C. City Council to achieve its goal of protecting consumers in a way that is feasible for the industry. Although the bill has not yet been signed, it is expected that the D.C. mayor will ultimately sign this version. Accounts receivable entities should make sure they read the amended bill in its entirety to ensure they will be ready to comply when it becomes effective.