DC Protects Consumers From Unjust Debt Collection Practices Amendment Act of 2021

On March 15, the D.C. Council of the District of Columbia Committee of the Whole met in a full hearing, in part to hear amendments introduced to B24-0357 by Councilmember and Chair Phil Mendelson (D).

B24-0357 is the Protecting Consumers from Unjust Debt Collection Practices Amendment Act of 2021, and was raised by Mendelson in July 2021 as a trio of legislation to address debt collection in the district during the pandemic along with Emergency B24-0347 and Temporary B24-0348. All three affect debt collection in D.C.; legislation such as this is often introduced as a series of emergency, temporary, and permanent bills. B24-0357 is the permanent version of the Protecting Consumers legislation.

At the hearing (video here), Chairman Mendelson gave a brief overview of B24-0357, and then introduced amendments to the bill. The amendments add considerable challenges to debt collectors looking to communicate with consumers or pursue legal remedies in the district.

• Revises the law so that it applies to any consumer debt, except a loan directly secured on real estate or a direct motor vehicle installment loan.

• Adds new definitions for “consumer” and “original creditor” to provide greater clarity in the law.

• Protects consumers, in addition to the current law, by prohibiting more and specific types of harassment against consumers, such as: Disclosing information of debt to consumer disputes; Disclosing citizenship status; and Visiting or threatening to visit a consumer’s home or place of employment (except for serving a lawsuit).

• Caps calls at four per account per week, with limited exceptions. “This is stronger than the federal law,” Mendelson explained. “If the consumer has two accounts in collections, the consumer could receive eight calls in a week under the cap in our committee print; under the federal law, it’s fourteen. So you can see that this is more protective of consumers.”

• Requires debt collectors to receive consent from the consumer to communicate via email, text message, and private message, and caps the number of electronic communications at five per week per account.

• Includes stronger validation and notice requirements than those the council adopted in B24-0348, including a provision that notices be in English and Spanish, except if a language other than Spanish was used in the contract; in which case, the notice must be sent in English and the language used in the contract.

• Requires the plaintiff in a debt collection case to submit proof of address verification and includes a photograph with coordinates and the date/time stamp on the photo.

After introducing these amendments in committee, Mendelson answered questions from other councilmembers. These answers provide additional insight into the D.C. City Council’s thinking on regulating debt collectors and protecting consumers.

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Councilmember Allen asked how the call caps would be enforced. Mendelson explained that they would be enforced “in the reactive sense;” that is, addressed after the fact, likely in a private right of action or enforcement. Councilmember Bonds reminded the committee that D.C. has the second highest number of debt collection complaints per capita, and then asked, “Why [is] the District … plagued upon so generously.” Mendelson referred the councilmember to the Racial Equity Impact Assessment for B24-0357, which discusses socioeconomic particulars specific to D.C. Bonds closed out her comments by noting that she felt four contacts per account per week is “still too many.”

These changes were unanimously approved by the council (with Councilmembers White and Gray absent).

The bill now returns to staff to make the technical and conforming changes, after which the bill will be re-heard and likely approved by the council. If passed by the council, the new legislation will take effect, following approval by the mayor (or in the event of veto by the mayor, action by the council to override the veto), a 30-day period of congressional review, and publication in the District of Columbia Register.