Debt collectors are notoriously aggressive with debtors, often using intimidation tactics and harassment to scare debtors. This bill would ensure that collectors can’t use overly aggressive tactics and make certain types of debt not reportable for credit purposes to provide important protections for debt-holders. Additionally, this bill includes important updates, such as adjusting statutory damages available under the federal Fair Debt Collection Practices Act for inflation and indexing them for inflation in the future, to update debt collection practices at the federal level.
While most people would agree that debt-holders should not be harassed or threatened by debt collectors, it is also important to bear in mind that collection of unpaid debt is an important linchpin of ensuring a functioning credit economy. Similarly, accurate credit reporting information is needed for lenders to make accurate judgments about potential borrowers’ creditworthiness. This legislation runs the risk of undermining the economy’s necessary credit extension and debt collection functions.