Collection Industry Out in Full Support of FDCPA Clarification Bill

Washington, DC – Lobbyist — for the average American, it’s a word that invokes imagery inspired by Hollywood: backroom deals in a cigar smoke-filled supper club by men in $5000 suits sipping brandy. And indeed, Hollywood rarely backs away from this stereotype when portraying lobbyists with TV shows like the “West Wing” and movies such as Bulworth and The Candidate. But for a day last week, many in the collection industry got to play the part of lobbyist at ACA’s Washington Agenda 2004. Most who participated enjoyed a newfound respect for the work lobbyists do on behalf of their clients.

Agency owners and leaders descended upon Washington, DC to educate members of Congress and find support for H.R. 3066, the Fair Debt Collection Practices Act (FDCPA) reform bill. Agencies from across the nation were represented at the event.

The conference kicked off with a lunch that featured keynote speaker Senator Robert Bennett (R-Utah), a long-time supporter of the ACA. He gave participants an inside look at the landscape of the current Congressional session and fielded questions on various pieces of legislation that could impact the collection industry. On the topic of H.R. 1169, a bill that would enable private collection agencies to collect delinquent taxes on behalf of the IRS, Sen. Bennett conceded that the industry might have to wait until after the election to get that measure passed. Sen. Bennett cited a “political climate untenable for controversial legislation” as the main reason for the potential hold.

It was then off to class as the ACA’s legislative affairs team and the staffs of various Senate and House committee members educated conference attendees about H.R. 3066 and gave pointers on how to speak to House and Senate members and their staffs. The bill already has fairly wide support in the House with 39 co-sponsors from both political parties. It was the job of those in attendance to meet with Representatives and Senators from their home states to find even more support.

The bill seeks to clarify some of the more ambiguous language in the current FDCPA. An example would be the desire to codify the right of collectors to pursue undisputed debts during the 30-day validation period as provided in the current FDCPA. According to the ACA, “although the Federal Trade Commission (FTC) and the vast majority of courts have interpreted this provision to permit collection of undisputed debts during the first thirty-days, a few misguided court decisions have unduly hampered legitimate collection and payment activities during this thirty-day period.”

Basically, the ACA and the participating collection agencies are seeking to limit the loopholes some lawyers are using to get questionable judgments against collectors or force settlement out of court. The FDCPA clarification bill does not seek to change or reverse any of the consumer protections written into the original regulations. Another goal of the proposed legislation is to clarify the language that references “reasonable time.” According to the ACA, “Currently, the Act states that a consumer’s attorney must respond to a collector’s communication within a ‘reasonable time.’ H.R. 3066 would clarify a reasonable time to be 30 days.”

As the changes to the FDCPA are benign, participants found themselves very well received by the members of Congress and their staffs. They all seemed to agree that ambiguity in legislation is something they strive to avoid. And it seems that the industry’s efforts had some benefit.

According to ACA’s Director of Government Affairs, Jenifer Loon, as of Thursday March 18th, four additional members of Congress had pledged their support for H.R. 3066 as a direct result of ACA member meetings. “We were very pleased with the turnout of our members and the effort they put forth on behalf of the industry,” Loon said.

The conference itself was also a success. In addition to Sen. Bennett, attendees heard addresses from the lead co-sponsor of the bill, Rep. Rob Andrews (D-NJ), as well as from staff members on the House Financial Services Committee and the House Ways and Mean Subcommittee on Oversight. The conference wrapped up with a fascinating inside look at Congressional races from around the country given by Bernadette Budde, Senior Vice President at Business Industry Political Action Committee, a firm that tracks elections all over the nation. Members also heard from representatives of various regulatory agencies such as the FTC, the FCC and the IRS.