Fair Debt Collection Practices for Servicemembers Act
- Bill Number
- S. 2454
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-07-24: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2025-09-22T11:39:29Z
AI-Generated Summary
Purpose This legislation amends the Fair Debt Collection Practices Act to strengthen protections for servicemembers and their families against specific forms of harassment by debt collectors. It aims to prevent threats involving military rank, security clearances, or military justice proceedings.
Key Provisions
- Expanded definitions of protected persons: The bill defines "covered individuals" to include active-duty members, their dependents, individuals separated from service within the past 365 days, certain family members of recently separated personnel, and members of the Selected Reserve.
- Prohibited communications: Debt collectors are barred from threatening to reduce a covered individual's rank, revoke their security clearance, or pursue prosecution under the Uniform Code of Military Justice when collecting debts.
- Unfair practices addition: It is now considered an unfair debt collection practice to represent that failure to cooperate with a debt collector will lead to rank reduction, security clearance revocation, or Uniform Code of Military Justice prosecution.
- Rule of construction: Debt collectors may still provide accurate information about debts owed, provided it does not involve the prohibited threats.
- GAO study requirement: The Comptroller General must examine and report to Congress on the Act's effects on timely information delivery, military readiness, and national security, with specific attention to uncollected debt among individuals holding security clearances.
Significant Changes to Existing Law The bill adds new subsections to Sections 805 and 808 of the Fair Debt Collection Practices Act. These changes introduce military-specific prohibitions not previously present in the statute, extending beyond general harassment rules to address threats unique to servicemembers.
Potential Impacts
- On government agencies: The Government Accountability Office will conduct a new study, and military branches may see effects on readiness and security clearance processes.
- On citizens: Servicemembers and their families gain targeted safeguards against debt collection tactics; debt collectors face additional compliance requirements and potential liability.
- On international relations: No direct effects identified in the legislation.
Main Stakeholders Affected
- Active-duty and reserve servicemembers, along with their dependents.
- Debt collection agencies and creditors.
- The Department of Defense and military justice system.
- The Government Accountability Office.
- Congress, as the body receiving the required report.
Notable Legal, Constitutional, or Political Implications The legislation builds on existing consumer protection law by linking debt collection practices to military-specific consequences, which could raise questions about the balance between debt enforcement and military discipline. It was introduced with bipartisan sponsorship and focuses on national security concerns tied to uncollected debts and security clearances.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Warnock, Raphael G. [D-GA]
Cosponsors (2)
Sen. Budd, Ted [R-NC], Sen. Cornyn, John [R-TX]
Recent Actions
- 2025-07-24: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2025-07-24: Introduced in Senate
Bill Versions
- Fair Debt Collection Practices for Servicemembers Act — issued 2025-07-24 — PDF (5 pages)