Congressman Cohen’s Fair Debt Collection Improvement Act Passes House as Part of Comprehensive Debt Collection Improvement Act

May 13, 2021
Press Release
Offered and cosponsored amendments to extend protections for consumers from predatory debt collection practices

WASHINGTON, D.C. – Today, Congressman Steve Cohen (TN-09) voted for, and the House passed, the Comprehensive Debt Collection Improvement Act with amendments that the Congressman offered and cosponsored to extend the bill’s protections for consumers from predatory debt collection practices. One of the amendments added a bill Congressman Cohen introduced earlier this Congress with Representatives Ocasio-Cortez and Bonamici, the Fair Debt Collection Improvement Act, which prohibits debt collectors from collecting or attempting to collect debt from consumers after a statute of limitation has expired. The second amendment, which the Congressman cosponsored, included provisions from the Securing Consumers Against Misrepresented (SCAM) Debt Act, a bill introduced with Congresswoman Bonamici to expand requirements debt collectors must meet to take legal action on a debt. 

Before the vote, Congressman Cohen spoke from the House floor in favor of his amendment and the bill. In those remarks, he said, in part: 

“It adds a section to the law that says if you’ve got a debt that is beyond the statute of limitations, that debt collection companies can’t go after you. 

“There’s a statute of limitations because sometimes, over a period of time, the facts become kind of vague in people’s minds and so the proof isn’t strong, and they want to make sure that this could be appropriate subject matter for a court case. And also sometimes debts are sold and debt collection agencies buy them and they really don’t know the facts, the amounts, and all of that. So if a debt is over the statute, this prohibits the debt collectors from going after someone. 

“I think I found this about eight years ago in an AARP magazine, which I read and they said how awful this was, and I thought it was too. It took eight years to get it here because it took a Democratic team to bring it to the fore to look out for debtors. I appreciate all of the support we’ve got and my cosponsors.” 

Congressman Cohen's full remarks can be seen here

The first amendment, which Congressman Steve Cohen offered with Congresswomen Suzanne Bonamici (OR-01) and Alexandria Ocasio-Cortez (NY-14), incorporates the entirety of the Fair Debt Collection Improvement Act. The Fair Debt Collection Improvement Act prohibits a debt collector from attempting to collect a debt after the statute of limitations has expired in order to ensure accuracy in debt collection, to prevent abusive tactics in the debt collection industry, and to allow consumers to get on with their lives. 

A statute of limitations is the legal time limit for filing a lawsuit. Courts have held that it is a violation of the Fair Debt Collection Practices Act to file or threaten to file a lawsuit after the deadline has expired. However, the FDCPA does not state that explicitly. Also, in most states, expiration of the statute of limitations is an affirmative defense that the consumer must know to raise, and most debt collection judgments are obtained either by default with the consumer not appearing or against a consumer who is not represented by an attorney. In addition, even if the statute of limitations to file a lawsuit has expired, in most states it is not unlawful to pursue these debts through other means. 

Attempts to collect old, time-barred debt pose several problems. Statutes of limitation exist because, over time, records are lost and memories fade, making it difficult for people to defend themselves. That is also true for out-of-court collections, especially because debt collectors often buy old debt for pennies on the dollar, without adequate documentation that they have the right debtor or right amount owed. Debt buyers often pursue people who do not owe the money or for the wrong amount.  In addition, some debt collectors trick consumers, who do not understand that they cannot be sued, into making a partial payment that may start the deadline all over and open the consumer to a lawsuit on an old debt. 

The second amendment, which was offered by Congresswoman Bonamici and cosponsored by Congressman Cohen, incorporates the provisions from the Securing Consumers Against Misrepresented (SCAM) Debt Act that expand requirements debt collectors must meet in order to take legal action on a debt, including providing advanced notice of commencing legal action and updating FDCPA to require proof that a debt is legally owed.