To amend the Fair Debt Collection Practices Act to prohibit creditors from taking action that is adverse to the interests of a consumer with respect to certain payments that are due in or shortly after the period of a disruption of the mail resulting from a national emergency declared under the National Emergencies Act.

June 19, 2003

Mr. SHERMAN (for himself, Mr. MCHUGH, Ms. LEE, Ms. NORTON, Mr. MCGOVERN, and Mrs. MALONEY) introduced the following bill; which was referred to the Committee on Financial Services

To amend the Fair Debt Collection Practices Act to prohibit creditors from taking action that is adverse to the interests of a consumer with respect to certain payments that are due in or shortly after the period of a disruption of the mail resulting from a national emergency declared under the National Emergencies Act.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Bill Payment Grace Period Act of 2003'.

SEC. 2. EXTENSION OF PERIOD FOR MAKING CERTAIN PAYMENTS DUE TO A NATIONAL EMERGENCY.

(a) IN GENERAL- The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) is amended by redesignating sections 813 through 818 in order as sections 814 through 819, and by inserting after section 812 the following:

`Sec. 813. Extension of period for making certain payments due to national emergency

`(a) The Secretary of the Treasury may designate a grace period under this section for the making of payments of debts by mail from or to any location within an area in which there occurs a disruption of the mail--

`(1) in the period of a national emergency declared under the National Emergencies Act (50 U.S.C. 1601 et seq.); and

`(2) as a result of the circumstances that resulted in such declaration.

`(b) In designating a grace period under this section, the Secretary shall determine, in consultation with the Postmaster General, and specify--

`(1) the geographic area in which occurred the disruption of the mail for which the grace period is designated; and

`(2) the period of time during which such disruption of the mail occurred.

`(c) A grace period under this section--

`(1) shall be comprised of a period of consecutive days designated by the Secretary;

`(2) shall begin upon the first day of the period of the disruption of the mail for which it is designated, as such period is specified under subsection (b)(2); and

`(3) except as provided in subsection (d), shall end not later than 7 days after the end of such period of the disruption of the mail.

`(d) The Secretary--

`(1) may designate a grace period under this section with respect each disruption of the mail occurring in the same national emergency period;

`(2) may extend the duration of a grace period under this section by up to 7 days, by publishing notice of such extension before the end of the grace period; and

`(3) may issue more than one extension under paragraph (2) for the same grace period.

`(e) A creditor or debt collector shall not--

`(1) impose any late fee or additional financing fee in connection with an affected mail payment by a consumer that is received after its due date;

`(2) provide to a credit reporting agency (as that term is defined in section 603) any information with respect to such payment that is adverse to the interests of the consumer or would adversely affect the credit standing of the consumer; or

`(3) take any other action that is adverse to the interests of the consumer as a consequence of the failure of the consumer to make such payment in a timely manner.

`(f) This section shall not apply to any payment by mail made by a consumer on a debt to a creditor if, before the disruption of the mail with respect to which a grace period is designated under this section--

`(1) the creditor or its debt collector gave the consumer, by mail, telephone, or otherwise, notice regarding alternative payment options that are available to such consumer without any fee or other charge; and

`(2) the consumer, with or without fee or charge, agreed to use an alternative payment option, or actually made one or more payments using an alternative payment option, within the 6-month period preceding the due date of the payment made by mail.

`(g) For the purposes of this section, evidence in the form of business records indicating that notice regarding alternative payment options was given before the date required by subsection (f) shall establish a conclusive presumption that such notice had been received by the consumer by such date.

`(h) In this section:

`(1) The term `affected mail payment' means any payment by mail of the full amount due on a debt owed by a consumer--

`(A) for which the due date occurs--

`(i) in the period of a disruption of the mail with respect to which a grace period is designated under this section; or

`(ii) within seven calendar days following the end of such disruption of the mail;

`(B) that is sent from, or addressed to, a location that is within the area in which the disruption of the mail occurred, as such area is specified under subsection (b)(1) for that grace period;

`(C) that is postmarked by not later than the expiration of the grace period; and

`(D) that is less than $10,000.

`(2) The term `alternative payment option' means any electronic, Internet-based, telephone authorized, or other means of making a payment other than by mail.

`(3) The term `due date' means the first date upon which a creditor or its debt collector may impose a late fee or other penalty for a failure of a consumer to make a periodic payment that is due on a debt.

`(4) The term `disruption of the mail' means any disruption in the pick-up, processing, transportation, or delivery of the mail of the United States.'.

(b) CONFORMING AND CLERICAL AMENDMENTS- The Fair Debt Collection Practices Act (15 U.S.C. 1601 et seq.) is further amended--

(1) in the table of sections preceding section 801 by striking the items relating to sections 813 through 818 and inserting the following:

`813. Extension of period for making certain payments due to national emergency.

`814. Civil liability.

`815. Administrative enforcement.

`816. Reports to Congress by the Commission.

`817. Relation to State laws.

`818. Exemption for State regulation.

`819. Effective date.';

(2) in section 812(b) by striking `section 813' and inserting `section 814'; and

(3) in section 816 (as redesignated by this Act) by striking `section 814' each place it appears and inserting `section 815'.

END