Senator Eldridge announces passage of Debt Collection Fairness Act by the State Senate
Senate bill would establish landmark consumer protections for debt collectors, strengthen economic security and prohibit debtors prisons in Massachusetts
BOSTON (3/28/2024) — State Senator Jamie Eldridge (D-Marlborough) is pleased to announce that the State Senate has unanimously passed An Act Relative to Fairness in Debt Collection also known as the Debt Collection Fairness Act (DCFA). The DCFA is sponsored by State Senator Jamie Eldridge (D-Marlborough) in the Senate, as well as State Representative Tram Nguyen (D-Andover) and State Representative Christine Barber (D-Somerville) in the House. A version of the Debt Collection Fairness Act, sponsored by State Senator Eldridge, has been filed in every session since the 190th General Court, in 2017.
The Debt Collection Fairness Act updates a number of extremely out-of-date consumer protections in order to ensure that people aren’t pushed over a financial precipice when they are sued for debts that are often old — and have been bought for pennies on the dollar by those currently trying to collect them. Specific provisions of the bill would reduce the interest rates on judgments on consumer debt to ensure that debts don’t last forever, protect enough wages from court-order seizure of wages to keep food on the table for the debtor, and ensure that no one in the Commonwealth is imprisoned for failure to pay a consumer debt.
The updates to the law include:
Protecting enough wages to keep food on the table. Creditors can ask a court to order an employer to seize wages from employees for old debts. The amount currently protected is insufficient in the face of housing costs and inflation. It desperately needs to be increased.
Reducing the interest rate on judgments on consumer debt so that debts can be satisfied. High interest rates on debts in collection mean that even those making payments may never pay them off.
Ensuring that no one in Massachusetts shall be imprisoned for failure to pay a consumer debt. In 2016 – the most recent data available –, four Massachusetts small-claims courts issued 1,325 civil arrest warrants for alleged debtors. The use or threat of use of such warrants can terrify consumers into making payments, even if all of their income is exempt. This practice needs to be reformed.
Reforms made in the Debt Collection Fairness Act protect thousands of families across Massachusetts, especially those in communities of color, who are struggling under the status quo — by providing more fairness in the collection of these debts, and more protection to ensure that families are not destroyed by old debts.
“I am very proud that the Debt Collection Fairness Act has once again passed the Senate, and I'm grateful to the Senate Chairman of the Joint Committee on Financial Services Paul Feeney for his tremendous advocacy for this important consumer protection bill, and the years of work by consumer advocacy groups," said State Senator Jamie Eldridge (D-Marlborough). "This bill aims to implement stricter regulations on debt collectors in order to prevent financial exploitation of Massachusetts residents. It seeks to safeguard consumers' economic security during debt repayment, prohibits excessively high-interest rates, and eliminate the possibility of consumers being sent to ‘debtor's prison’ when facing legal action. The Debt Collection Fairness Act is a critical consumer protection bill, and I'm grateful to Senate President Spilka and Senate Ways and Means Chairman Rodrigues for their support.”
“In Massachusetts, no family should have to choose between putting food on the table or making a minimum payment on a ballooning debt,” said Senator Paul Feeney, (D-Foxborough), Chair of the Joint Committee on Financial Services. “Debt collection practices can, at times, be predatory, unlawful, and designed to squeeze every dime out of middle-class and low-income families, especially with the added burden of accumulating interest and additional fees that are designed to push families over a financial cliff. The Debt Collection Fairness Act will not eliminate debt or an obligation to pay, but it will add needed guardrails to protect hard-working families from financial ruin, give a lifeline to those caught in a debt spiral, and help deliver hope to those in a vicious cycle. I thank Senator Jamie Eldridge for his advocacy, the many stakeholders and advocates who brought this bill forward, and the leadership of Chairman Michael Rodrigues and Senate President Karen Spilka for prioritizing and championing this matter in the Massachusetts State Senate.”
Attorney Nadine Cohen on behalf of GBLS states, "After working on this bill for over 8 years, Greater Boston Legal Services is thrilled to see that low-income consumers will no longer have to pay high interest rates on consumer debt judgments and that more of their hard-earned wages will be protected from garnishment. We are grateful to the Senate for passing these important consumer protections and look forward to swift action from the House.”
“The Senate took important action to provide common-sense protections for families working hard to pay their rent and put food on the table,” said Michael Best, senior attorney for the National Law Center. “We’re grateful to Senate leadership for working to build consensus for its passage and to Sen. Eldridge for sponsoring the bill and speaking out for fairness and equity.”
