HOUSE DOCKET, NO. 3920        FILED ON: 1/18/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 965

The Commonwealth of Massachusetts

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PRESENTED BY:

Lori A. Ehrlich

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to consumer protection following a bankruptcy.

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PETITION OF:

HOUSE DOCKET, NO. 3920        FILED ON: 1/18/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 965

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 519 OF 2017-2018.]

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-First General Court
(2019-2020)

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An Act relative to consumer protection following a bankruptcy.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

Chapter 93 of the General Laws is hereby amended by inserting, after section 54A, the following section:-

Section 68F. (a) For the purposes of this section, the following terms shall, unless the context clearly appears otherwise, have the following meanings:-

“Consumer”, the buyer for value of a good or service, those who finance the acquisition of goods or services through the use of loans, cash advances and credit cards.

“Financial or lending institution”, an insured depository institution as defined in section 3(c)(2) of the Federal Deposit Insurance Act, a credit union with accounts insured by the National Credit Union Share Insurance Fund, a Federal home loan bank or a member, as defined in section 2 of the Federal Home Loan Bank Act in 12 U.S.C. section 1422, of the Federal home loan bank system; a system institution of the Farm Credit System, as defined in section 5.35(3) of the Farm Credit Act of 1971; a small business investment company, as defined in section 103 of the Small Business Investment Act of 1958, 15 U.S.C. section 662; a depository institution holding company as defined in section 3(w)(1) of the Federal Deposit Insurance Act; a Federal Reserve bank or a member bank of the Federal Reserve System; a branch or agency of a foreign bank as such terms are defined in paragraphs (1) and (3) of section 1(b) of the International Banking Act of 1978; or a mortgage lending business or any person or entity that makes in whole or in part a federally related mortgage loan as defined in section 3 of the Real Estate Settlement Procedures Act of 1974.

“Consumer credit reporting agencies”, any person that, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and that uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports to third parties bearing on a consumer’s credit worthiness, credit standing, or credit capacity, the information for which is provided to them by (1) public record information and (2) credit account information from persons who furnish that information regularly and in the ordinary course of business.

“Reaffirmed debt”, a liability that survives a debtor’s bankruptcy discharge through the Bankruptcy Court approval of a reaffirmation agreement. 

(b) Any financial or consumer lending institution that reports the credit transactions of its consumers to 1 of the major credit reporting agencies shall have an affirmative duty to report to those agencies any payments that continue to be made by the consumer on the financial or consumer lending institution’s debt after the filing of the customer’s bankruptcy, if the customer’s account has been reaffirmed by a judge presiding over the customer’s bankruptcy case. 

(c) If the financial or consumer lending institution’s financial obligation was not reaffirmed as part of the customer’s bankruptcy, and if the account has been active following the consumer’s bankruptcy filing, the number of months elapsed  since the consumer’s bankruptcy filing and the number of payments on the liability made by the consumer during that period of time shall be reported.

(d) Any financial or consumer lending institution:-

(i) who furnishes information to any consumer reporting agency, or user of information which willfully fails to comply with any requirement imposed under this section, with respect to any consumer shall be liable to that consumer in an amount equal to the sum of—

(1) any actual damages sustained by the consumer as a result of the failure;

(2) such amount of punitive damages as the court may allow; and

(3) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court;

(ii) who furnishes information to any consumer reporting agency, or user of information which is negligent in failing to comply with this section with respect to any consumer shall be liable to that consumer in an amount equal to the sum of any actual damages sustained by the consumer as a result of the failure; and in the case of any successful action to enforce any liability under this section, the costs of the action and reasonable attorney's fees as determined by the court; and

(iii) found to be in violation of this section shall be: (1) required to correct the error by reporting all necessary payments to the major credit reporting agencies as soon as possible; and (2) subject to a fine not to exceed $1,000 for the first offense; $2,500 for the second offense; and $5,000 for the third and each subsequent offense; provided, that such fine shall be enforced and collected by the attorney general.