I'm sorry, the what?
Oh good. You're here.
Today we're going to talk about Maxine Waters's Comprehensive Debt Collection Improvement Act (CDCIA) (H.R.2547).
Oh, is this Reg F?
No. This is not Reg F. And it's not from the CFPB. It...'s a lot of things. Eight things. So we'll start at the beginning and work our way to the end.
Back in March of 2020, House Financial Services Chairwoman Maxine Waters shared a 6-page plan. This plan, aimed at helping consumers who were just beginning to quarantine, many of whom found themselves out of work and with no expected income, sought monthly payments as well as suspension of nearly all consumer and small business debt payments, supported by reimbursements to creditors through the Federal Reserve.
Wait, did that happen?
No. Or at least not all of it. Lots of consumer protections were put in place during the (continuing, don't forget) pandemic, including rent and mortgage protections. But Waters's 6-page plan was not fully implemented.
Instead, it provided the backbone of what is now H.R. 2547, Comprehensive Debt Collection Improvement Act.
And that's not Regulation F?
Right, it is not. In fact, there are pieces of the CDCIA that don't entirely align with Regulation F; and Regulation F isn't mentioned in the text of the CDCIA. Lots of talk about amending the FDCPA here and there; but there's no clear link between this proposed bill and the CFPB -- except in the places where the proposed bill explicitly tells the Director (of the CFPB) the things they'd need to do.
Essentially, what the CDCIA does is take 8 proposed consumer protection bills and consolidate them into one comprehensive consumer protection bill. The affected existing bills are:
HR 2540, the “Small Business Fairness Lending Act” (Velazquez)
Introduced by: RepNydia Velazquez (D-NY)
What it would do: Amend the Truth in Lending Act (TILA) to restrict the use of confessions of judgment for small business owners, extending the protections that currently exist in consumer lending.
What it would become as part of HR 2547: Title I -- Small Business Lending Fairness Act
HR 1491, the “Fair Debt Collection Practices for Servicemembers Act” (Dean)
Introduced by: Rep Madeleine Dean (D-PA)
What it would do: Amend the FDCPA to prohibit debt collectors from threatening a servicemembers.
What it would become as part of HR 2547: Title II -- Fair Debt Collection Practices for Servicemembers Act
HR 2498, the “Private Loan Disability Discharge Act” (Dean)
Introduced by: Rep Madeleine Dean (PA)
What it would do: Amends TILA to require the discharge of private student loans in the case of permanent disability of the borrower.
What it would become as part of HR 2547: Title III -- Private Loan Disability Discharge Act
HR 2537, the “Consumer Protection for Medical Debt Collections Act” (Tlaib)
Introduced by: Rep Rashida Tlaib (D-MI)
What it would do: Bar entities from collecting medical debt or reporting it to a consumer reporting agency without giving a consumer notice about their rights under the FDCPA and the FCRA.
What it would become as part of HR 2547: Title IV -- Consumer Protection for Medical Debt Collections Act
HR 1657, the “Ending Debt Collection Harassment Act” (Pressley)
Introduced by: Rep Ayanna Pressley (D-MA)
What it would do: Amend the FDCPA to prohibit a debt collector from contacting a consumer by email or text message without a consumer’s consent to be contacted electronically.
What it would become as part of HR 2547: Title V -- Ending Debt Collection Harassment Act
HR 2572, the “Stop Debt Collection Abuse Act” (Cleaver)
Introduced by: Rep Emanuel Cleaver (D-MO)
What it would do: Expand the definition of debt covered under the FDCPA to include money owed to a state or local government; municipal utility bills, tolls, traffic tickets, and court debts are subject to the FDCPA. It would also extend FDCPA protections as it relates to debt owed to a federal agency, and limit the fees debt collectors can charge.
What it would become as part of HR 2547: Title VI -- Stop Debt Collection Abuse Act
HR 2628, the “Debt Collection Practices Harmonization Act” (Meeks)
Introduced by: Rep Gregory Meeks (D-NY)
What it would do: Updates monetary penalties for inflation, including class action limits, and clarifies that courts can award injunctive relief, as well as add protections to consumers affected by national disasters.
What it would become as part of HR 2547: Title VII -- Debt Collection Practices Harmonization Act
HR 2458, the “Non-Judicial Foreclosure Debt Collection Clarification Act” (Auchincloss)
Introduced by: Rep Jake Auchincloss (D-MA)
What it would do: Reverse Obduskey v. McCarthy and Holthus LLP by amending FDCPA to clarify that entities in non-judicial foreclosure proceedings are covered by the statute.
What it would become as part of HR 2547: Title VIII -- Non-Judicial Foreclosure Debt Collection Clarification Act
You said something about "pieces not aligning with Reg F"?
Right. HR 1657, the “Ending Debt Collection Harassment Act,” if passed as part of the comprehensive CDCIA, would take away an agency's ability to rely on consent captured by the creditor, or the immediately previous agency. Each handler of the debt would have to get their own consent.
Additionally, within the CDCIA itself (Title V, Section 502 (c)), there's this:
(c) Protection Of Consumers From Unlimited Texts And Emails 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 consumer electronically (including by email or text message) without consent of the consumer to communicate via that method, after such consent has been withdrawn, or more frequently than the consumer consents to be contacted.”.
Regulation F provides a safe(ish) harbor for phone calls with its "7-in-7" rule. But it did not establish any safe harbors for the number of texts or emails. Some consumer reporting suggested that the CFPB was granting collection agencies unlimited license to text and email. It really didn't. And Section 502 (c) doesn't give any guardrails, either. Instead, it seems to affirm that agencies currently have the power to text and email unlimitedly (which they can't), and that this rule will stop that practice (which isn't happening).
I told you, it was a lot.
So, what should we do right now about this? Panic? Should we panic?
No. Don't panic. But keep this on your radar -- unlike any of us did with Hunstein.
The CDCIA passed through the House Financial Services Committee. Here are the steps a Committee idea has to go through in order to become a law. (I've struck out the ones that have happened.)
1. Someone has an idea.
2. A representative (in this case, Maxine Waters) sponsors the bill and it's assigned to a committee for study.
3. Once studied, it's decided if the proposed bill should move to the next step for voting. (This happened on 21 April 2021, where the HFSC not only passed all eight of the proposed bills, but Waters's comprehensive CDCIA, too.)
4. If the committee passes it (which it did: 30-23, generally along party lines), the bill is put on the calendar for a full vote by the House of Representatives. It only needs a simply majority (218 out of 435) to pass on to the Senate. We do not know the date of the House vote yet.
5. In the Senate, the bill is discussed, debated, and possibly amended, and finally voted on. Again, it only needs a simple majority: 51 out of 100.
6. If it passes the Senate, it's referred back to a committee of House and Senate members to iron out the wrinkles.
7. It's then returns to the House and Senate for one final approval.
8. The President has 10 days to sign or veto the proposed bill.
But here's the thing.
Any of these proposed bills could make it to the finish line. Rep Waters's CDCIA may not survive, but one of the 8 bills that make up the full CDCIA could.
So we should panic?
No. But: be vigiliant. And we'll be vigilant, too. Reach out with any questions! (And if you're not a Research Assistant member, I'll likely try to sell you on becoming a Research Assistant member. But I'll still answer your question.)