By Colin A. Young
State House News Service
State House News Service
Posted Jul. 13, 2016 at 8:08 PM
BOSTON – With three Democrats siding with the chamber’s six Republicans, the Massachusetts Senate on Wednesday passed a bill that supporters said will better protect consumers going through debt collection processes
The bill (S 2409) sponsored by Sen. Jamie Eldridge reduces from six to four years the statute of limitations for the collection of consumer debt and prohibits debt collectors from bringing a lawsuit or other legal proceeding after that period. It also extinguishes the right to collect the debt after the statute of limitations expires
Since 2006, the attorney general’s office has received an annual average of 1,300 complaints about the debt collection industry, Eldridge said
“If people incur a debt, they should be doing everything they can that’s possible to pay off that debt,” Eldridge said. “But let’s recognize that in many instances our federal, our national bankruptcy system provides an easier path for corporations to reduce or shred their debt than residents in this country … I think that’s a deeply unfair system.
Eldridge said his bill also prohibits consumer payments made after the statute of limitations clock begins to run from being used to “revive or extend the limitations period or bar the consumer from asserting a defense to the collection of a consumer debt,” a tactic sometimes used by debt collectors
The bill also protects a debtor’s weekly wages that are less than 90 times the hourly minimum wage from garnishment, and limits garnishments to 10 percent of earnings over 90 times the minimum wage. It also prohibits the use of a certain civil arrest warrant — which are often used to compel a person to appear in court — in most debt collection circumstances
The Senate Republican caucus offered their own bill in the form of an amendment. Minority Leader Bruce Tarr said Eldridge’s bill would accelerate foreclosures, limit flexibility in paying off debts and generate a crush of lawsuits that would warrant “an HOV lane to the courthouse.
“If you want to accelerate foreclosure, if you want to limit consumer flexibility, if you want to destroy the negotiability of instruments issued in Massachusetts by saying the debt absolutely goes away … then the underlying bill is the one for you,” Tarr said. “But if you want to say that we’re going to protect consumers … if you want to make sure there is transparency in the process and if you want to make sure you can’t be subject to the nefarious trick of taking a minimum payment to extend the statute of limitation, then I would suggest that our amendment is for you.
Sen. Vinny deMacedo, a Plymouth Republican, also raised concerns, saying that the bill would make lenders less likely to take risks and lend to borrowers who may not have the best credit
“These people aren’t crazy, they’re not just going to give money away. They’re going to do it and they’re going to calculate the risk,” he said. “As we make that risk much more difficult, they are going to make it that much harder for individuals to get loans. For me, the concern here is the unintended consequences.
The GOP amendment failed 9-30 and then Eldridge’s bill was passed on a 29-9 roll call vote with Democratic Sens. Michael Moore, Kathleen O’Connor Ives and Michael Rush joining the Republicans in opposition
The bill now moves to the House for its consideration.
Check out the story online, here.