TEXAS CODIFIES DEBT BUYER NOTICE REQUIREMENTS

Today, Texas Governor Greg Abbott signed into law House Bill 996 by Representative Nicole Collier which requires debt buying companies to provide consumers a written notice when a debt the consumer owes is beyond the applicable statute of limitations (SOL). The notice is similar to the notice required in the Federal Trade Commission’s 2012 Asset Acceptance Consent Decree which has also been statutorily codified in California (2013 for debt buyers/2018 for debt collectors), Connecticut (2013), and West Virginia (2014).

This bill represents a major victory for RMAI. When Representative Collier first introduced this bill in 2017, the bill lowered the SOL to three years and expunged the debt at the expiration of the SOL on all accounts owned by debt buyers. After testifying in opposition to the bill, RMAI was invited into negotiations with consumer advocates and recommended the alternative consumer notice approach which was eventually adopted as depicted above. RMAI’s final opposition to the bill was lifted in 2019 when the sponsor agreed not to lower existing SOL time frames and to remove language which would have created a state “borrowing statute” (i.e. adopting other states’ SOLs in certain circumstances).

The bill goes into effect on September 1, 2019. RMAI would strongly recommend that its members share this Member Alert with those internally responsible for compliance and legal operations.

This Alert is intended for Members of RMAI 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.