RMAI anticipates that any day now Colorado Governor Jared Polis will sign into law Senate Bill 211 which prohibits new “extraordinary collection actions” until November 1, 2020, when a consumer informs a judgment creditor that they have experienced a COVID-19 hardship. While the Governor has until July 19, 2020 to sign the bill, we expect it will be signed much sooner. This bill takes effect the day it is signed.
An extraordinary collection action is defined as an “action or proceeding in the nature of an attachment, garnishment, levy, or execution to collect or enforce a judgment on a debt.” The judgment creditor is required to provide consumers a written notice informing them of their right to claim a COVID-19 hardship. The required boilerplate consumer notice is contained in the bill. The prohibition may be extended until February 1, 2021, by the Administrator of the Uniform Consumer Credit Code. The bill will also automatically exempt from levy and sale under writ of attachment or writ of execution through February 1, 2021, up to $4,000 in a depository account or accounts in the name of the debtor.
RMAI retained a Colorado lobbyist to work with an industry coalition to obtain amendments to the fast-moving bill that was introduced in early June. The coalition was able to successfully: (1) reduce the length of the prohibitions by six months; (2) require consumers to indicate that they have a COVID-19 hardship to avoid garnishment – originally it would have provided an automatic garnishment prohibition to every Colorado resident; (3) reduce the bank levy exemption from a permanent $7,000 exemption to a temporary $4,000 exemption; and (4) delete language which would have increased the garnishment exemption from 40x state minimum wage to 80x state minimum wage.
RMAI recommends that you immediately share this Member Alert with your legal counsel, compliance department, and operational staff to ensure the broadest level of knowledge of these new requirements.
Support the RMAI Legislative Fund with Our Silent Auction – Make your Donation and Bid Today!
The reach of RMAI’s advocacy efforts extends to state and federal regulatory and legislative activity, like this effort in Colorado. You can support the Legislative Fund by donating and bidding on items at Executive Summit Silent Auction.
This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.