We are a different kind of collection agency.

State Legislature Committee to Consider Strict Debt Buyer Bill After Industry Input

by Patrick Lunsford —

A committee in the Oregon House of Representatives next week will consider a bill that could place extensive new requirements on debt buyers that file collection lawsuits against consumers. In a public hearing late last month, debt buyers expressed opposition to the bill as introduced noting “this legislation has very significant problems.”

HB 2252 was introduced early this year at the very beginning of Oregon’s current legislative session. After being referred to the House Committee on Consumer Protection and Government Effectiveness, the bill had a public hearing and is scheduled for a work session on April 21 which may include a Committee vote and recommendation on passage.

The bill’s purpose, as written, is to establish requirements under which debt buyer may bring legal action to collect debt and specifies the notices that a debt buyer must give to a debtor before a suit is filed. The new requirements include an exhaustive list of documents that must be presented to the consumer and the court.

In separate submitted testimony, debt buying trade group DBA International and ARM giant Encore Capital Group stressed their opposition to the bill at a public hearing on March 26.

Encore noted that the bill goes far beyond federal requirements and new rules in other states and is impractical in its current form.

“As introduced, HB 2252 would require documents and data that simply do not exist,” Encore said. “Both the CFPB and FTC have publicly recognized that pre-charge-off account itemization is typically not provided to debt purchasers. Similarly, a copy of the original contract is often unavailable. This is largely because banks that originate credit card debt are, under federal law, not required to maintain this information longer than 24 months.”

Encore also explained that the original contract may not be available simply because it does not exist. “For an increasing number of credit card accounts opened by phone or online today, there is never a contract that the consumer signs,” the company noted.

“As drafted, the legislation’s impossible requirements would in no uncertain terms eliminate the ability of the entire debt collection industry to do business in Oregon,” Encore concluded.

DBA International had similar reservations about the bill. The trade group noted that the bill would do nothing to prevent scammers from preying on Oregon residents.

“DBA International respectfully opposes HB 2252 as originally drafted as it imposes extreme and in some cases impossible requirements on the industry which will not solve the problem of ‘bad actors,’” the DBA said, “it will simply serve to punish legitimate companies already complying with the law while the conduct of bad actors would continue.”

DBA noted that the bill would require debt buyers to provide over 20 different data elements, documents, and notices to the consumer on three different occasions as proof that they have the correct consumer identity, they own the debt, and have the correct balance owed.

The work session scheduled for next week in the House Committee could see amendments or other alterations made to the bill and could also result in a vote on whether to send the legislation to the full House.