Under the Dome

NC House votes to change debt collection rules

The N.C. House voted 70-38 Thursday to change the state’s debt collection rules, despite concerns from legislators in both parties that the bill gives debt collectors too much power to contact neighbors and family members.

Senate Bill 678 would allow lenders to seek written permission from borrowers at any time to communicate with third parties, such as the borrowers’ family members, friends, neighbors and employers.

Rep. Grier Martin, a Raleigh Democrat, said the bill “steps back some of the protections that we do extend to borrowers under current law.” He said a permission form could be included in loan closing documents, allowing debt collectors to call the borrowers’ acquaintances if they fall behind on payments and can’t be found.

“There’s no requirement for the lender to tell the borrower that that form is optional,” he said. “We could all sit down and come up with some language that would eliminate that potential for abuse.”

Martin had an unlikely ally in his opposition: Rep. Michael Speciale, a New Bern Republican who’s one of the House’s most conservative members. “This could open up a can of worms if not properly worded,” he said.

But Rep. Leo Daughtry, a Smithfield Republican, said the bill drew no opposition in a committee meeting from advocacy groups or others. “It was well scrubbed, and a lot of questions were asked,” he said.

Opponents of the bill say they hope to propose some tweaks before a final vote next week.