HB 166 (BR 855) - S. Westrom, R. Damron, T. Thompson
AN ACT relating to debt adjusting.
Amend KRS 380.010 to define "debt adjuster," "debtor," "personal information," and "additional interested party," and amend definition of "debt adjusting"; create new sections of KRS Chapter 380 to set forth requirements regarding debt-adjusting contracts, including the requirement that contracts be in writing and signed and dated by the debtor; provide a debtor's right to cancel and set forth provisions relating to cancellation; prohibit the waiver of a debtor's rights; provide for a private right of action for persons entering into debt-adjusting transactions who have suffered loss of money or property, including the right to punitive damages and attorney's fees and costs; require debt adjusters to adhere to stated information security standards; prohibit the sale of debtor's personal information except under permitted circumstances; amend KRS 380.040 to prohibit a debt adjuster from accepting a fee, contribution, or other consideration in advance of complete performance of promised services, to require debt adjuster's to maintain insurance for violations KRS Chapter 380, and to require debt adjusters to maintain a bond or irrevocable letter of credit in the amount of $25,000 in favor of the Attorney General for the benefit of the Commonwealth or any person suffering injury or loss by reason of a violationof KRS Chapter 380; amend KRS 380.990 to allow for imposition of a $5,000 civil penalty for violation of KRS 380.040 and stipulate that violations of KRS Chapter 380 are unfair, false, misleading, or deceptive trade practices, including the ramifications thereof; amend KRS 380.030 to clarify that attorneys admitted to the practice of law in this state by the Kentucky Supreme Court are not to be considered debt adjusters.
HB 166 - AMENDMENTS
HCS - Retain original provisions except expand the definition of personal information; clarify that a person must receive money or something of value to be engaged in "debt adjusting"; specify that "secured debt" means debt primarily for personal, family, or household use that is secured by a mortgage, deed of trust, other equivalent security interest on residential real property, or collateral that has a mortgage lien interest in real property; enumerate activities in which a debt adjuster may not engage, including misappropriation of funds, settlement requirements, restrictions on powers of attorney, and misrepresentations; specify requirements for agreements for debt adjusting.
SCS - Retain original provisions, except amend KRS 380.010 to require insurance companies to give notice to the Attorney General at the time of cancellation, nonrenewal, modification or change in insurance coverage; amend KRS 380.040 to increase the insurance amount to $250,000 and to increase the bond amount to $50,000 if a debt adjuster deals with debts secured by a mortgage on a residence; amend KRS 380.030 to exempt creditors when adjusting debts owed to them by the debtor from being debt adjusters; create a new section of KRS Chapter 380 to specify that this Act does not limit financial institutions' abilities to collect debt owed to them by debtors.
(Prefiled by the sponsor(s).)
Jan 5-introduced in House; to Banking & Insurance (H)
Feb 4-posted in committee
Feb 10-reported favorably, 1st reading, to Consent Calendar with Committee Substitute
Feb 11-2nd reading, to Rules; posted for passage in the Consent Orders of the Day for Wednesday, February 17, 2010
Feb 17-3rd reading, passed 98-0 with Committee Substitute
Feb 18-received in Senate
Feb 22-to Banking & Insurance (S)
Mar 16-reported favorably, 1st reading, to Calendar with Committee Substitute
Mar 17-2nd reading, to Rules
Mar 24-posted for passage in the Regular Orders of the Day for Thursday, March 25, 2010
Mar 25-3rd reading, passed 37-0 with Committee Substitute ; received in House; to Rules (H)
Mar 26-posted for passage for concurrence in Senate Committee Substitute for Monday, March 29, 2010
Mar 29-House concurred in Senate Committee Substitute ; passed 96-0; enrolled, signed by each presiding officer; delivered to Governor
Apr 8-signed by Governor (Acts ch. 86)