I 

114TH CONGRESS 

2D SESSION H. R. 5434 

To amend the Fair Debt Collection Practices Act to restrict the debt collection 

practices of certain debt collectors. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 9, 2016 

Mrs. LOVE (for herself, Mr. ELLISON, Mr. HILL, and Mr. CLEAVER) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Fair Debt Collection Practices Act to restrict 

the debt collection practices of certain debt collectors. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Debt Collection 

5 Abuse Act of 2016’’. 

6 SEC. 2. DEFINITIONS. 

7 Section 803 of the Fair Debt Collection Practices Act 

8 (15 U.S.C. 1692a) is amended— 


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1 (1) in paragraph (4), by striking ‘‘facilitating 

2 collection of such debt for another’’ and inserting 

3 ‘‘collection of such debt’’; 

4 (2) by amending paragraph (5) to read as fol5 lows: 

6 ‘‘(5) The term ‘debt’ means— 

7 ‘‘(A) any obligation or alleged obligation of 

8 a consumer to pay money arising out of a 

9 transaction in which the money, property, in10 surance, or services which are the subject of the 

11 transaction are primarily for personal, family, 

12 or household purposes, whether or not such ob13 ligation has been reduced to judgment; or 

14 ‘‘(B) any obligation or alleged obligation of 

15 a consumer— 

16 ‘‘(i) to pay a loan, an overpayment, a 

17 fine, a penalty, a fee, or other money cur18 rently or originally owed to a Federal 

19 agency; and 

20 ‘‘(ii) that is not less than 180 days 

21 past due.’’; and 

22 (3) in paragraph (6)— 

23 (A) by striking the first sentence and in24 serting the following: ‘‘The term ‘debt collector’ 

25 means any person who uses any instrumentality 


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1 of interstate commerce or the mails in any busi2 ness the principal purpose of which is the col3 lection of any debts; who regularly collects or 

4 attempts to collect, directly or indirectly, by the 

5 person’s own means or by hiring another debt 

6 collector, debts owed or due or asserted to be 

7 owed or due another or that have been obtained 

8 by assignment or transfer from another; or who 

9 regularly collects debts currently or originally 

10 owed or allegedly owed to a Federal agency.’’; 

11 and 

12 (B) in subparagraph (F), by inserting ‘‘or 

13 that has been obtained by assignment or trans14 fer from another’’ after ‘‘owed or due another’’. 

15 SEC. 3. DEBT COLLECTION PRACTICES FOR DEBT COLLEC16 TORS HIRED BY GOVERNMENT AGENCIES. 

17 The Fair Debt Collection Practices Act (15 U.S.C. 

18 1692 et seq.) is amended by inserting after section 812 

19 (15 U.S.C. 1692j) the following: 

20 ‘‘§ 812A. Debt collection practices for debt collectors 

21 hired by Federal agencies 

22 ‘‘(a) LIMITATION ON TIME TO TURN DEBT OVER TO

23 DEBT COLLECTOR.—A Federal agency that is a creditor 

24 may sell or transfer a debt described in section 803(5)(B) 

25 to a debt collector not earlier than 90 days after the date 


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1 on which the obligation or alleged obligation becomes de2 linquent or defaults. 

3 ‘‘(b) REQUIRED NOTICE.— 

4 ‘‘(1) IN GENERAL.—Before transferring or sell5 ing a debt described in section 803(5)(B) to a debt 

6 collector or contracting with a debt collector to col7 lect such a debt, a Federal agency shall notify the 

8 consumer not fewer than 3 times that the Federal 

9 agency will take such action. 

10 ‘‘(2) FREQUENCY OF NOTIFICATIONS.—The 

11 second and third notifications described in para12 graph (1) shall be made not less than 30 days after 

13 the date on which the previous notification is 

14 made.’’. 

15 SEC. 4. UNFAIR PRACTICES. 

16 Section 808 of the Fair Debt Collection Practices Act 

17 (15 U.S.C. 1692f) is amended by striking paragraph (1) 

18 and inserting the following: 

19 ‘‘(1) The collection of any amount (including 

20 any interest, fee, charge, or expense incidental to the 

21 principal obligation) unless— 

22 ‘‘(A) such amount is expressly authorized 

23 by the agreement creating the debt or permitted 

24 by law; and 


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1 ‘‘(B) in the case of any amount charged by 

2 a debt collector collecting a debt described in 

3 section 803(5)(B), such amount is— 

4 ‘‘(i) reasonable in relation to the ac5 tual costs of the collection; 

6 ‘‘(ii) authorized by a contract between 

7 the debt collector and the Federal agency; 

8 and 

9 ‘‘(iii) not greater than 10 percent of 

10 the amount collected by the debt col11 lector.’’. 

12 SEC. 5. GAO STUDY AND REPORT. 

13 (a) STUDY.—The Comptroller General of the United 

14 States shall commence a study on the use of debt collec15 tors by State and local government agencies, including— 

16 (1) the powers given to the debt collectors by 

17 Federal, State, and local government agencies; 

18 (2) the contracting process that allows a Fed19 eral, State, or local government agency to award 

20 debt collection to a certain company, including the 

21 selection process; 

22 (3) any fees charged to debtors in addition to 

23 principal and interest on the outstanding debt; 

24 (4) how the fees described in paragraph (3) 

25 vary from State to State; 


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1 (5) consumer protection at the State level that 

2 offer recourse to those whom debts have been wrong3 fully attributed; 

4 (6) the revenues received by debt collectors 

5 from Federal, State, and local government agencies; 

6 (7) the amount of any revenue sharing agree7 ments between debt collectors and Federal, State, 

8 and local government agencies; 

9 (8) the difference in debt collection procedures 

10 across geographic regions, including the extent to 

11 which debt collectors pursue court judgments to col12 lect debts; and 

13 (9) any legal immunity or other protections 

14 given to the debt collectors hired by State and local 

15 government agencies, including whether the debt col16 lectors are subject to the Fair Debt Collection Prac17 tices Act (15 U.S.C. 1692 et seq.). 

18 (b) REPORT.—Not later than one year after the date 

19 of enactment of this Act, the Comptroller General of the 

20 United States shall submit to Congress a report on the 

21 completed study required under subsection (a). 

Æ 


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