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In today’s economic environment, credit unions (and all other financial institutions) are having to spend a greater amount of their time and resources on their collection activities. This increased activity may have led you to wonder…does the FDCPA and its collection rules apply to my credit union? Well, if you want a short answer, it would be NO, as long as the credit union is collecting its own debts in its own name. BUT, in the world of financial regulatory compliance, there is never a short answer!
If you live in a state or territory of the United States, which I am guessing you do, you probably have local rules or regulations which are as restrictive, if not more so, than the FDCPA. For example, the Uniform Consumer Credit Code, which has been adopted by 12 states and territories includes numerous prohibited practices when it comes to collecting a debt. Some of these prohibited practices include (at a high level):
- The use of an illegal threat, coercion or attempt to coerce.
- The oppression, harassment, or abuse of a person while collecting a debt.
- The dissemination of information relating to a debt or debtor.
- The use of fraudulent, deceptive, or misleading representation or means in the attempt to collect a debt or to obtain information concerning a debtor.
The 12 states and territories that have adopted the Uniform Consumer Credit Code are Colorado, Idaho, Indiana, Iowa, Kansas, Maine, Oklahoma, South Carolina, Utah, Wisconsin, Wyoming, and Guam. Of course, most other states and territories also have rules or regulations concerning the collection of debts, but they vary widely in scope and restrictiveness.
So, before you go and call a member at 1:30 in the morning about a loan that has gone south, you had better check with the laws and regulations of your state or territory to verify that what you are doing is permissible!
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