Washington State House of Representatives Office of Program Research	BILL ANALYSIS
Financial Institutions & Insurance Committee

HB 1983

Brief Description:  Modifying "debt collector" so the term excludes affiliates of creditors that service creditor's accounts.

Sponsors:  Representatives Benson and Hatfield.

Brief Summary of Bill

$Removes persons from the requirements of the Fair Debt Collection Act if they only collect debts owed to affiliates or if they are not considered a debt collector under federal law.

Hearing Date:  2/20/01

Staff:  Charlie Gavigan (786‑7340).

Background: 

Collection agencies, including out-of-state collection agencies, are regulated by state law.  They must be licensed by the Department of Licensing.  Violation of certain prohibited practices is also a violation of the Consumer Protection Act.  There is a similar federal law on debt collectors; generally, the stricter provisions apply

Summary of Bill: 

A person who only collects debts for affiliates is not a collection agency as long as the person=s principal business is not debt collection.  Also, an out-of-state collection agency that is excluded from the definition of ?debt collector@ under the federal Fair Debt Collection Practices Act is not a collection agency under Washington State law.  Those excluded are: (1) creditors collecting their own debts in their own name; (2) persons who only collect debts for affiliates and the person=s principal business is not debt collection; (3) government employees in the performance of their official duties; (4) service of process in connection with judicial enforcement of a debt; (5) non-profit corporations providing credit counseling and debt liquidation at the request of consumers; and (6) a person collecting a debt incidental to an escrow, a debt originated by the person, a debt the person acquired that was not in default when acquired, or a debt resulting from the person being the secured party in a commercial credit transaction.    

Appropriation:  None.

Fiscal Note:  Not Requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.