More than one month after the Oklahoma Senate passed the Bartmann Ethical Debt Collection Act by a 40-2 vote, the state's House of Representatives has referred the bill for additional study.
A debt-collection industry coalition - including trade groups ACA International, DBA International and several debt buyers - led opposition to the bill since the Senate approved the measure in early March.
The coalition encouraged collection agencies and debt buyers in the state to lobby members of Oklahoma's House Judiciary Committee. The coalition wants lawmakers to take a closer look at the bill.
Tulsa, Okla.-based CFS II CEO Bill Bartmann helped initiate the bill, also known as Senate Bill 1430. Republican Senator Gary Stanislawski authored it.
According to Bartmann, the bill calls for state supervision and licensing of debt buyers and employees, among other requirements. He says it is pro-business legislation designed to "create a level playing field that encourages competition between smaller, more ethical state firms and larger out-of-state debt buyers who often cut corners."
Bartmann believes the measure should help unclog Oklahoma's court system by reducing the number of "knee-jerk lawsuits filed by collection attorneys against consumers who have not yet had a reasonable opportunity to pay legitimate bills."
Bartmann founded CFS II two years ago. More than 12 years ago, his debt-buying firm Commercial Financial Services (CFS) closed amid a fraud scandal. A federal grand jury indictment of Bartmann followed. Along with former CFS executive Jay Jones, Bartmann was accused of creating a shell company, Dimat Corp., to inflate the performance of CFS.
Bartmann was acquitted. Jones pleaded guilty to a conspiracy charge and was sentenced to five years in prison. Federal Bureau of Prisons records show he was released in 2007.
CFS, which employed 3,600 people at the time it failed, routinely bid up the price of bad debt and monopolized forward-flow contracts with major banks in the late 1990s. Bartmann was the first to securitize bad debt on Wall Street, giving him access to large amounts of capital that none of his competitors could match, an approach that helped him quickly build his company into a $3 billion giant.
SB 1430 may not be considered by the House this legislative session because it is scheduled to end no later than May 25. It could come up for consideration in the 2013 session.
