Fair Debt Collection Practices for Servicemembers Act
Summary
The Fair Debt Collection Practices for Servicemembers Act aims to amend the Fair Debt Collection Practices Act, providing enhanced protection against debt collector harassment of members of the Armed Forces. It specifically targets threats related to rank reduction, security clearance revocation, and prosecution under the Uniform Code of Military Justice. The bill also mandates a GAO study on the impact of the Act on timely information delivery, military readiness, and national security.
Expected Effects
This act will likely reduce instances of debt collectors using threats specific to military members to coerce payment. It will also provide data, via a GAO study, on the broader impacts of debt collection practices on military readiness and national security. The act aims to protect servicemembers from unfair debt collection practices.
Potential Benefits
- Provides specific protections to servicemembers against debt collector harassment.
- Prevents debt collectors from threatening actions related to military status.
- Offers a 365-day protection period for recently separated servicemembers.
- Mandates a GAO study to assess the impact on military readiness and national security.
- Clarifies that providing lawful debt information is still permissible.
Potential Disadvantages
- May increase the cost of debt collection for debts owed by servicemembers.
- Could potentially lead to reduced credit availability for servicemembers if lenders perceive increased risk.
- The GAO study may reveal unintended consequences or areas for further improvement.
- The definition of 'covered individual' may need refinement based on the GAO study's findings.
- Potential for increased litigation as debt collectors and servicemembers interpret the new provisions.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution by seeking to protect a vulnerable population (servicemembers) from abusive practices. It does not appear to infringe upon any specific constitutional rights. The legislative power to regulate debt collection falls under the commerce clause, as it involves interstate financial transactions.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).