Washington D.C. Enacts Temporary Amendments to Debt Collection Practices

Strategic Insights -

The District of Columbia has made significant changes to its debt collection laws through the signing of bill 24-169, the "Protecting Consumers from Unjust Debt Collection Practices Temporary Amendment Act of 2021." This legislation brings temporary updates to debt collection practices in the district, which were previously restricted by the COVID-19 public health emergency. The changes aim to modernize the district's debt collection law, originally written in 1971, and provide protections for consumers in Washington D.C.

Key Takeaways:

  • The legislation restricts debt collectors from calling consumers more than three times in a seven-day period, with calls initiated by the consumer or at the consumer's request not counting toward the limit.
  • Itemized notices of the amount claimed to be owed by the consumer are required, including copies of the charge-off statement and the most recent monthly statement for credit card debt.
  • The amendment strikes outdated language requiring debt collectors to send 24 periodic statements for credit card debt, citing feasibility concerns for banks to provide such information.
  • Consumers are entitled to receive relevant information regarding their debt obligation, including fees and charges.
  • The legislation includes additional requirements for debt collectors, such as sending a notice stating information on the consumer's account, including the name of the original creditor and the current creditor or owner of the debt.
  • If the consumer is an individual, the court may award an additional penalty in an amount not less than $500 and not to exceed $4,000.

Statistics:

  • The legislation will take effect on September 23, 2021.
  • The restrictions on debt collection communications were previously set to end on September 23, 2021, but will now continue for an additional 90 days.
  • The district's debt collection law was written in 1971.
  • Credit card debt is subject to specific requirements, including itemized accounting using the charge-off balance, copies of the charge-off statement, and most recent monthly statement.

Sources:

  • ACA International press release, 2021
  • City Council Chairman Phil Mendelson and Attorney General Karl Racine's original legislation introduction
  • Washington, D.C. City Council meeting minutes, July 13, 2021
  • Washington, D.C. City Council meeting minutes, August 3, 2021