2015 -- H 6158

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO FINANCIAL INSTITUTIONS - POWERS AND OPERATIONS

     

     Introduced By: Representatives Trillo, Williams, and Hull

     Date Introduced: May 01, 2015

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 19-3 of the General Laws entitled "Powers and Operations" is

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hereby amended by adding thereto the following section:

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     19-3-13.3. Assignment of revolving loans and credit card debt - Limits of recovery. –

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      (a) Any person or entity who shall purchase any charged-off credit card debt from any

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credit card creditor, shall only add amounts of money to the defaulted charged-off credit card debt

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which is allowed under federal law and the state laws that are identified as the applicable state

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laws pursuant to the governing law/choice of law provision of the credit card creditor's cardholder

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agreement.

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     (b) Any person or entity who shall purchase any charged-off credit card debt from any

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credit card creditor and attempts to collect such debt from the debtor and any person or entity

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who attempts to collect such debt on behalf of the person or entity who purchased such debt and

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who adds an amount of money to the debt in violation of the provisions of this section shall be

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considered to have committed a false, deceptive, and misleading practice in violation of the

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Rhode Island fair debt collection practices act, § 19-14.9-1 et seq.

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     (c) If a court has entered a final judgment, order or decree, prior to the effective date of

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this section, against a debtor in favor of a person or entity attempting to collect charged-off credit

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card debt from a debtor, the debtor may seek a motion for relief from the judgment, order or

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decree and a court shall relieve the debtor from the judgment, order or decree if the court finds

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that the person or entity has violated any provision of this section or chapter 14.9 of title 19.

 

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     SECTION 2. Section 19-14.9-9 of the General Laws in Chapter 19-14.9 entitled "Rhode

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Island Fair Debt Collection Practices Act" is hereby amended to read as follows:

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     19-14.9-9. Validation of debts. -- (1) Within five (5) days after the initial

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communication with a consumer in connection with the collection of any debt, a debt collector

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shall, unless the following information is contained in the initial communication, or the consumer

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has paid the debt, send the consumer a written notice containing:

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      (a) The amount of the debt including a breakdown of the total balance due that identifies

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the amount attributable to principal and, if applicable, all post charge-off principal, interest and

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any other fees;

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      (b) The name of the creditor to whom the debt is owed;

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      (c) A statement that unless the consumer, within thirty (30) days after receipt of the

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notice, disputes that validity of the debt, or any portion thereof, the debt will be assumed to be

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valid by the debt collector;

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      (d) A statement that if the consumer notifies the debt collector in writing within the thirty

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(30) day period that the debt, or any portion thereof, is disputed, the debt collector will obtain

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verification of the debt or a copy of a judgment against the consumer and a copy of such

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verification or judgment will be mailed to the consumer by the debt collector; and

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      (e) A statement that, upon the consumer's written request within the thirty (30) day

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period, the debt collector will provide the consumer with the name and address of the original

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creditor, if different from the current creditor.

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      (2) If the consumer notifies the debt collector in writing within the thirty (30) day period

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described in paragraph (d) of subsection (1) of this section that the debt, or any portion thereof, is

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disputed, or that the consumer requests the name and address of the original creditor, the debt

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collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector

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obtains verification of the debt or a copy of a judgment, or the name and address of the original

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creditor, and a copy of such verification or judgment, or name and address of the original

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creditor, is mailed to the consumer by the debt collector.

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      (3) The failure of a consumer to dispute the validity of a debt under this section shall not

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be construed by any court as an admission of liability by the consumer.

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     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO FINANCIAL INSTITUTIONS - POWERS AND OPERATIONS

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     This act would provide that for any person or entity who purchases charged-off credit

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card debt from a credit card creditor, the only amounts that could be added to the amount to be

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recovered, such as interest, would be amounts specifically allowed under federal and state laws.

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Violations of this provision would be considered to be a false, deceptive, and misleading practice

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under the Rhode Island fair debt collection practices act, chapter 14.9 of title 19.

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     This act would take effect upon passage.

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