Title: Stop Debt Collection Abuse Act of 2019
Policy area: Finance and Financial Sector

Summary:
Stop Debt Collection Abuse Act of 2019
This bill applies certain consumer protections regarding debt collection to debt owed to a federal agency and to debt buyers.
A federal agency that is a creditor may not sell or transfer a debt to a debt collector until 90 days after the obligation arises. Specified notice to the consumer of such a sale or transfer is required.
A collector of debt owed to a federal agency may not collect any interest, fee, charge, or expense that is (1) unreasonable in relation to actual costs, (2) not authorized by a contract between the debt collector and the federal agency, or (3) greater than 10% of the amount collected.
The Government Accountability Office shall report on the use of debt collectors by federal, state, and local government agencies.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2516 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2516

 To amend the Fair Debt Collection Practices Act to restrict the debt 
            collection practices of certain debt collectors.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 19, 2019

  Mr. Booker (for himself and Mr. Lee) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To amend the Fair Debt Collection Practices Act to restrict the debt 
            collection practices of certain debt collectors.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop Debt Collection Abuse Act of 
2019''.

SEC. 2. DEFINITIONS.

    Section 803 of the Fair Debt Collection Practices Act (15 U.S.C. 
1692a) is amended--
            (1) in paragraph (4), by striking ``facilitating collection 
        of such debt for another'' and inserting ``collection of such 
        debt'';
            (2) by striking paragraphs (5) and (6) and inserting the 
        following:
            ``(5) The term `debt' means--
                    ``(A) any obligation or alleged obligation of a 
                consumer to pay money arising out of a transaction in 
                which the money, property, insurance, or services that 
                are the subject of the transaction are primarily for 
                personal, family, or household purposes, whether or not 
                such obligation has been reduced to judgment; or
                    ``(B) any obligation or alleged obligation of a 
                consumer--
                            ``(i) to pay a loan, an overpayment, a 
                        fine, a penalty, a fee, or other money to a 
                        Federal agency; and
                            ``(ii) that is not less than 180 days past 
                        due.
            ``(6) The term `debt collector'--
                    ``(A) means any person who--
                            ``(i) uses any instrumentality of 
                        interstate commerce or the mails in any 
                        business the principal purpose of which is the 
                        collection of any debts;
                            ``(ii) regularly collects or attempts to 
                        collect, directly or indirectly, by its own 
                        means or by hiring another debt collector, 
                        debts owed or due or asserted to be owed or due 
                        another or that have been obtained by 
                        assignment or transfer from another; or
                            ``(iii) regularly collects debts owed or 
                        allegedly owed to a Federal agency;
                    ``(B) includes--
                            ``(i) any creditor who, in the process of 
                        collecting the debts of the creditor, uses any 
                        name other than the name of the creditor which 
                        would indicate that a third person is 
                        collecting or attempting to collect such debts; 
                        and
                            ``(ii) for purposes of section 808(6), any 
                        person who uses any instrumentality of 
                        interstate commerce or the mails in any 
                        business the principal purpose of which is the 
                        enforcement of security interests; and
                    ``(C) does not include--
                            ``(i) any officer or employee of a creditor 
                        while, in the name of the creditor, collecting 
                        debts for such creditor;
                            ``(ii) any person while acting as a debt 
                        collector for another person, both of whom are 
                        related by common ownership or affiliated by 
                        corporate control, if the person acting as a 
                        debt collector does so only for persons to whom 
                        it is so related or affiliated and if the 
                        principal business of such person is not the 
                        collection of debts;
                            ``(iii) any officer or employee of the 
                        United States or any State to the extent that 
                        collecting or attempting to collect any debt is 
                        in the performance of his official duties;
                            ``(iv) any person while serving or 
                        attempting to serve legal process on any other 
                        person in connection with the judicial 
                        enforcement of any debt;
                            ``(v) any nonprofit organization which, at 
                        the request of consumers, performs bona fide 
                        consumer credit counseling and assists 
                        consumers in the liquidation of their debts by 
                        receiving payments from such consumers and 
                        distributing such amounts to creditors; and
                            ``(vi) any person collecting or attempting 
                        to collect any debt owed or due or asserted to 
                        be owed or due another or that has been 
                        obtained by assignment or transfer from another 
                        to the extent such activity--
                                    ``(I) is incidental to a bona fide 
                                fiduciary obligation or a bona fide 
                                escrow arrangement;
                                    ``(II) concerns a debt which was 
                                originated by such person;
                                    ``(III) concerns a debt which was 
                                not in default at the time it was 
                                obtained by such person; or
                                    ``(IV) concerns a debt obtained by 
                                such person as a secured party in a 
                                commercial credit transaction involving 
                                the creditor.''.

SEC. 3. DEBT COLLECTION PRACTICES FOR DEBT COLLECTORS HIRED BY 
              GOVERNMENT AGENCIES.

    The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) is 
amended by inserting after section 812 (15 U.S.C. 1692j) the following:
``Sec. 812A. Debt collection practices for debt collectors hired by 
              Federal agencies
    ``(a) Limitation on Time To Turn Debt Over to Debt Collector.--A 
Federal agency that is a creditor may sell or transfer a debt described 
in section 803(5)(B) to a debt collector not earlier than 90 days after 
the date on which the obligation or alleged obligation arises.
    ``(b) Required Notice.--
            ``(1) In general.--Before transferring or selling a debt 
        described in section 803(5)(B) to a debt collector or 
        contracting with a debt collector to collect such a debt, a 
        Federal agency shall notify the consumer not fewer than 3 times 
        that the Federal agency will take such action.
            ``(2) Frequency of notifications.--The second and third 
        notifications described in paragraph (1) shall be made not less 
        than 30 days after the date on which the previous notification 
        is made.''.

SEC. 4. UNFAIR PRACTICES.

    Section 808 of the Fair Debt Collection Practices Act (15 U.S.C. 
1692f) is amended by striking paragraph (1) and inserting the 
following:
            ``(1) The collection of any amount (including any interest, 
        fee, charge, or expense incidental to the principal obligation) 
        unless--
                    ``(A) such amount is expressly authorized by the 
                agreement creating the debt or permitted by law; or
                    ``(B) in the case of any amount charged by a debt 
                collector collecting a debt for a Federal agency, such 
                amount is--
                            ``(i) reasonable in relation to the actual 
                        costs of the collection;
                            ``(ii) authorized by a contract between the 
                        debt collector and the Federal agency; and
                            ``(iii) not greater than 10 percent of the 
                        amount collected by the debt collector.''.

SEC. 5. GAO STUDY AND REPORT.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the use of debt collectors by Federal, State, and 
local government agencies, including--
            (1) the powers given to the debt collectors by Federal, 
        State, and local government agencies;
            (2) the contracting process that allows a Federal, State, 
        or local government agency to award debt collection to a 
        certain company, including the selection process;
            (3) any fees charged to debtors in addition to principal 
        and interest on the outstanding debt;
            (4) how the fees described in paragraph (3) vary from State 
        to State;
            (5) consumer protection at the State level that offer 
        recourse to those whom debts have been wrongfully attributed;
            (6) the revenues received by debt collectors from Federal, 
        State, and local government agencies;
            (7) the amount of any revenue sharing agreements between 
        debt collectors and Federal, State, and local government 
        agencies;
            (8) the difference in debt collection procedures across 
        geographic regions, including the extent to which debt 
        collectors pursue court judgments to collect debts; and
            (9) any legal immunity or other protections given to the 
        debt collectors hired by State and local government agencies, 
        including whether the debt collectors are subject to the Fair 
        Debt Collection Practices Act (15 U.S.C. 1692 et seq.).
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General of the United States shall submit to 
Congress a report on the completed study required under subsection (a).
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