Fair Debt Collection Practices for Servicemembers Act

The "Fair Debt Collection Practices for Servicemembers Act" proposes to amend the Fair Debt Collection Practices Act (FDCPA) to provide enhanced protections for military personnel and their families. This legislation specifically prohibits debt collectors from making certain threats when attempting to collect a debt from a covered member , which includes active duty servicemembers, their dependents, and individuals separated from service within the last year. Prohibited threats include those related to a servicemember's rank reduction, the revocation of their security clearance, or prosecution under the Uniform Code of Military Justice (UCMJ). Furthermore, the bill makes it an unfair practice for debt collectors to even imply that failure to cooperate could lead to such severe consequences. To assess the impact of these new protections, the legislation mandates a Government Accountability Office (GAO) study. This study will examine the Act's effects on the timely delivery of information to servicemembers, overall military readiness, and national security, including how uncollected debt might affect servicemembers with security clearances.