Comprehensive Debt Collection Improvement Act

Comprehensive Debt Collection Improvement Act

This bill generally provides additional financial protections for consumers and places restrictions on debt collection activities.

Regarding additional consumer protections, the bill

• expands certain protections currently applicable to federally backed student loans to private student loans, including by requiring the discharge of a private student loan in the event of the borrower's death or total and permanent disability;
• prohibits a consumer reporting agency from adding any information related to a debt arising from a medically necessary procedure to a consumer credit report and places restrictions on the reporting of other types of medical debt; and
• applies certain consumer protections regarding debt collection to debt owed to a federal agency, states, debt buyers, and businesses engaged in nonjudicial foreclosures.

It also prohibits certain loan conditions that limit a borrower's opportunity to be heard in court in the event of default.

Additionally, the bill restricts debt collectors and debt collection practices by

• prohibiting a debt collector from representing to a service member that failure to cooperate with a debt collector will result in a reduction of rank or similar action,
• limiting a debt collector's electronic communications with a debtor without the debtor's permission, and
• requiring a debt collector to provide advance notice to a consumer of the intent to take legal action to collect a debt.

The Government Accountability Office must report on the impact of debt collection on service members and on the use of debt collectors by federal and state agencies.