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The collection and debt buying industries are hoping members of the U.S. House of Representatives will approve a bill that would eliminate the requirement of having to mail annual privacy notices.
Passage of H.R. 3506, the "Eliminate Privacy Notice Confusion Act," would amend the Gramm-Leach-Bliley Act (GLBA) "to provide an exception from the continuing requirement for annual privacy notices for financial institutions which do not share personal information with affiliates, and for other purposes," the bill states.
ACA International, an association of credit and collection professionals, points out that under the Fair Debt Collection Practices Act (FDCPA), companies that purchase debt are prohibited from sharing consumers' personal information with third parties. Furthermore, companies that purchase debt also are subject to GLBA, which requires financial institutions to provide annual privacy notices that give consumers the opportunity to opt out of having their information shared with third parties.
The bill is "important for the debt purchasing members of the association because it is a costly regulatory burden that doesn't serve a consumer protection purpose," Adam Peterman, ACA's government affairs director, tells Collections & Credit Risk. "Scrapping this requirement would mean lower costs for financial services institutions and less junk mail for consumers."
GLBA's requirement that debt buyers send annual notices proves "duplicative and unnecessary," and is more likely to cause confusion with the consumer who receives the notice, because these companies already are subject to the FDCPA, the ACA states.
DBA International, a trade association for debt buyers, estimates its members pay $25 million a year to satisfy the reporting requirements.
Rep. Erik Paulsen (R-Minn.) introduced the bill July 31, just before Congress' August recess. Congress is scheduled to reconvene Sept. 8.
