Georgia House Committee Changes Language in Debt Buyer Bill

A committee in the Georgia House approved a bill passed earlier by the Senate that had contained language placing severe restrictions on debt buyers in the state. But the committee changed some of the language before approving the bill and sending it to the full House.

The “Small Business Borrower Protection Act,” Georgia Senate Bill 448, was introduced by Senator Don Balfour “to provide for recovery limits for debt obligations by successor creditors; to provide for applicability; to require successor creditors to submit the amount paid for a debt during recovery proceedings; to provide for related matters; to repeal conflicting laws; and for other purposes.”

The bill passed the Senate in February unanimously and was referred to the House’s Banks & Banking Committee, which approved it Monday. The bill’s original language would have restricted the possible collections for a guaranteed account purchased by a debt buyer to the amount paid for the account. The legislation also contained language that would force debt buyers to reveal how much they paid for certain accounts.

But the committee made some important changes to the language in the definitions section of the bill it sent to the full House, which may exempt ARM industry debt buyers.

Previously, “successor creditors” had been defined as “any person who did not enter into the original debt obligation with the debtor and has by assignment, sale, transfer, or other means acquired the original debt obligation,” (with “person” also defined as a company or corporate entity).

The committee’s latest version of the bill provides the following definition for “successor creditors,” (emphasis added on changes):

‘Successor creditor’ means any person, other than an institution whose deposits are federally insured or its affiliates, who did not enter into the original debt obligation with the debtor and has by assignment, sale, transfer, or other means acquired the original debt obligation directly from a federal bank regulatory agency.

The bill still needs to be considered before the full House.