RMA’s Director of Government Affairs, David Reid, recently visited Massachusetts to advocate on behalf of the receivables management industry. Reid testified on two bills—Senate Bill 120, sponsored by committee chair Senator James B. Eldridge, and House Bill 1982, sponsored by Representative Bradley H. Jones, Jr. RMA also met with leadership and staff on the committees where both bills would head after being reported out of their committees, including members of the House Consumer Protection & Professional Licensure Committee and the Senate Ways & Means Committee.
RMA submitted a memo of opposition to SB 120. This bill, among other things, would: (1) reduce the statute of limitations in an action for the collection of a consumer debt from six to four years to be measured from the earlier of the date of charge-off, placement for collection, or 180 days after the last regular payment; (2) prohibit payments made prior to the limitations period expiring from tolling the statute; (3) prohibit any attempt to collect a consumer debt once the statute of limitations has expired but would allow a debt collector to accept an unsolicited voluntary consumer payment on a debt; (4) extinguish judgments after five years unless the creditor takes action to enforce the judgment; and (5) reduce the percentage that is subject to wage garnishment.
Approximately 15 speakers testified in opposition or support of this bill. RMA believes this bill will be reported out of committee and will likely pass the Senate. The fight to stop this bill will happen in the House—the same place the bill failed last year. That being said, RMA is always willing to work with the sponsor on amendments that could remove our opposition.
RMA submitted a memo of support for HB 1982. This bill was introduced at RMA’s request to require passive debt buyers to be licensed as debt collectors in Massachusetts. Currently, third-party collection agencies and active debt buyers are regulated and licensed by the Massachusetts Division of Banks while passive debt buyers are not required to be licensed and regulated by the Attorney General’s Office. This bill would also exempt debt buying companies from bonding requirements and allow affiliated companies to be licensed under a single license and subject to a single examination. If this bill is enacted it may put an end to the ongoing class action lawsuits against passive debt buyers, as it will help clarify that passive debt buyers are not currently required to be licensed.
Reid was the only individual to testify on HB 1982. Due to the nature of the hearing, RMA has the impression that this bill is likely to pass through the Legislature without opposition.
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This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.