Vermont Legislature SmartTranscripts:

[Rep. Edye Graning (Vice Chair)]: Good afternoon. This is House Commerce and Economic Development. Today is Thursday, February 5. It's 02:13 in the afternoon. We are changing topics and working on page three eighty five, an act relating to remedies and protections for victims of coerced death. Chris Curtis from office is going to start us off because he has time constraints. And then we will have a full walkthrough of the updated strike on.

[Rep. Michael Marcotte (Chair)]: First of

[Christopher J. Curtis (Assistant Attorney General, VT; Director, Consumer Assistance Program)]: all, thank you, Madam Vice Chair. Thank you, members of the committee, for inviting me back to testify today. For the record, my name is Christopher Curtis. I'm an assistant attorney general for the state of Vermont. I'm the director of the consumer assistance program, which is where your constituents call if they have questions, concerns, problems with consumer matters. So this bill is very germane to the kind of work that we do and the kinds of complaints that we get. I wanted to I will be brief today. As the vice chair mentioned, I have a 02:30 that I need to get to, and I know you have a walk through scheduled with your legislative council. But I did want to thank the committee and your legislative counsel for taking into consideration some of the questions or issues that I raised in my prior testimony, one of which has to do with confidentiality of victims and ensuring that perpetrators can't essentially, start pursuing various state agencies to see if a complaint may have been lodged and then get information, maybe even location information of the victim or information about their financial circumstances, for example, or even just information to find out if they made a complaint and then might retaliate for having made that complaint. So there is a provision, as I understand it, in the bill that you will be walking through today that addresses that concern that makes it very clear that for those victims that are contacting state agencies about course debt, those victims would have their information be kept confidential, exempt from the Public Records Act. So I think that addresses the concern from our office's perspective and probably from other state agencies that might have that kind of sensitive information provided to them, for that narrow set of consumers that this affects. Secondly, I wanted to address and thank the committee for looking at rulemaking. As you will recall, section two had a mandatory provision to implement rules by January 2027, even though the effective date won't be until 2028. So that has been addressed through the sort of more standard, broader, frankly, consumer protection, rulemaking provision that is in many, many, consumer protection statutes throughout the green books, which basically just says, you know, the attorney general may promulgate rules because this is a consumer statute, and we have that rulemaking authority. So that just means that if there's really no conflict and there's nothing to do, we're not required to do something and go through that exercise. Obviously, the debt collection rules will remain in force and effect regardless of the statute, but you do have some nice protective provisions in the statute that will help these victims or coerced debtors regardless. So statute always supersedes the rule. So to the extent that you're putting new protections in place, those will control. And in the event that a creditor determines that perhaps this person does not qualify for these protections, and if that's verified, they will still have that panoply of protections and rights that are set out through federal protections and the Fair Debt Collection Practices Act and under Vermont rule in c p one zero four. So I just wanted to offer you that reassurance. I think that's, good, and then we'll have rulemaking authority if, in fact, there turns out there's something that we need to do to take action and amend those debt collection rules. So thank you for that. Those are the really the two main concerns that I wanted to flag and just acknowledge the committee's work on. I did want to mention too, and I think you'll hear from our sister agency at DFR a little later on that I believe the committee is considering providing authority to one of our agencies or both of our agencies to look at coming up with certain forms for the creditors. It's our judgment. We typically don't regulate financial entities or insurance entities. That tends to be the purview of the Department of Financial Regulation. So our preference would be that agency, which is the regulatory body that works with those financial institutions to be the one that comes up with the form. It would be more natural for those private entities to be reaching out to or contacting DFR and to have one host for all the forms so that there's not confusion about who is it that we're supposed to be dealing with here. I think a one stop shop that actually drafts and interprets the forms and can provide those to those private parties and then answer any questions about them would be most appropriate. Of course, we defer to the will of our friends in the legislature, but it does strike me that for banking insurance purposes or for sort of corporate purposes, DFR might be a more familiar state agency than the attorney general's office, which tends to work more directly with the public or with consumers. So we might be getting the complaints from the victims, but we wouldn't be providing a form to the financial institutions or the creditors or someone like that. That would be unusual, at least from our perspective. So, that's just something for your consideration. I'll flag. I think that may be addressed in one way, shape, or form, and you can also certainly ask, the department about its position on that as well. So I hope that all makes sense. And if you have any questions for me, I'd be happy to answer those. And I can also come back or supplement my testimony by email or in writing.

[Rep. Edye Graning (Vice Chair)]: Nobody has questions for Chris. We'll let him get to his next appointment, and we'll bring Maria up. And if we have AG questions, we'll jot them down and anybody's off.

[Rep. Michael Marcotte (Chair)]: All right, thank you so much. Thank you. Thanks, Chris. Judge Maria? Hello? Hi, Maria.

[Maria Royal (Legislative Counsel)]: How are you? It's nice to be back. Maria Royal with Legislative Counsel. Chris just made part of my job a lot easier, but we'll address those sections when we get there. So what's on screen and posted on the webpage is a revised draft of the strike all amendment to H-three 85. The one thing I'm going to mention, there is a proposal to include some suspicious banking bank hold provisions as a possible amendment or inclusion in the strike all. It's not in this draft. It's a separate document. So we'll start walking through the changes now. They're mostly highlighted in yellow, unless they're technical, and then there's one section which I can explain in little more detail. So the first change has to do with adequate documentation, just adding the phrase at least one of the following, not wanting to discourage a debtor from submitting more than one document if that seemed appropriate and would help to make their claim a little more persuasive. Then subdivision B, replacing there was and and so in terms of what's considered adequate documentation, subdivision B was a Federal Trade Commission identity theft report. There was some feedback that these reports are pretty easy to obtain. You just fill out the report online, print it out. So number one, they're not really verified necessarily by a governmental entity. And, yes, I think that was part of the concern, is that that would be too easy of a document to obtain to substantiate a claim. But instead, the language reads, A copy of an official valid report filed with a federal, state, or local law enforcement agency, the filing of which subjects the person filing the report to criminal penalties for filing false information if in fact the information in the report is false. Subdivision C is just redrafting, making it a little bit simpler. Same thing, a court order finding that the debt was forced. No substantive change. Subdivision D, some additional qualifying language with respect to the sworn written certification from a qualified third party professional. It goes on to say, regarding the debtor's claim of coerced debt based on information gathered by the third party while acting in their professional capacity. So not after the fact, but that this is information that's disclosed during a professional relationship. And then, you, this committee, suggested that former Subdiction D and the other document that demonstrates a person was subject to forced debt and that supports a debtor's statement of forced debt might be a little bit too broad. I think the proposal was to strike that provision. So then, under the definition of coerced debt, you'll see that stricken language there. So that first subdivision A, the debt was incurred as a result of that first Roman numeral one, the result of the debtor's personal information without the debtor's knowledge, authorization or consent. Somebody raised a concern that that's actually the definition of identity theft it's a separate issue, and that the real issue is what's stated in was Roman numeral two, but now will be one. The use or threat of force, intimidation, undue influence, fraud, deception, coercion, or other similar means against the debtor. So

[Rep. Michael Marcotte (Chair)]: and

[Maria Royal (Legislative Counsel)]: then there was a proposal discussed in this committee, I believe, about removing the economic abuse definition and inclusion in here because it's already it's kind of subsumed by the other definitions, so not not necessary. B is the same. C is the same, nonmortgage loan. So another qualification that the debt is not a commercial loan for your consideration. And then, moving on to the definition of I think that four was just missing. I believe there was any substantive change there. Then you can see former subdivision six, definition of economic abuse is no longer needed. And then we get down to a qualified third party professional. One technical change and one subsequent change. There is a proposal that also includes a court appointed special advocate. So this would be somebody that's appointed by a judge, typically in a proceeding where there might be an a used or neglected child to represent the best interest of the child. Usually volunteer with training, sometimes used interchangeably with guardian ad litem. I don't know if there's actually they might be there. I looked up the definition. Didn't find any of Vermont laws, so I don't know if there's a but we can confirm that. But a court appointed trained volunteer who works with abused and neglected children in court proceedings would qualify as a third party professional. And then, D. Hadred, a licensed attorney or a health care provider as defined in, and it's just separating the two to make it look just easier to understand. They're separate people. Statement of Poor's Get. There were no changes there except under this is a written statement that needs to be mailed to the creditor, and there's, you know, specific requirement based on mailing through the postal service. Then it also included any other electronic submissions. And then you'll see the stricken language as well as any other written method deemed appropriate by the commissioner. So just a suggestion that the Attorney General's Office have rulemaking authority, they can always add additional forms of mailing if that seems appropriate. Otherwise, the mentioned methods are broad enough. Just changing the certificate of the qualified third party professional to square up with the definitions, you can see no longer referencing economic abuse per se, but expanding to include a vulnerable adult who was a survivor of abuse, neglect, or exploitation. So that reflects the change that you had made previously about who potential debtors are. I should have highlighted on line eight under coerced debt prohibited. So, a person shall not cause another person to incur coerced debt, and then substantiated coerced debt is not enforceable against the debtor. Substantiated is a new term. That should have been highlighted. So this next section regarding the creditor's conduct, once they received statement of coerced debt, was reorganized a lot. It was really confusing to of scratch through things were moved around, so I didn't do that. And if I had had more time, I would have actually done a compare document that actually tracked the changes, which I'll still do, to make sure everyone understands exactly what the changes were. So the first subsection, just so we're clear, so within ten business days following receipt of a debtor's statement of coerced debt and adequate documentation, the creditor shall cease all collection activities, refrain from selling and assigning, transferring from consideration such debt. I just wanted to mention that there had been a provision that said seats no longer collect garnished wages, but you actually need a court order to do that. So it didn't seem if you're in court, then you're already noticed and you're litigating this or, you know, having a judge look at the issue. But a creditor cannot simply garnish wages under their normal collection practices. But similarly, those what's considered collection activities Doesn't necessarily include the creditor can't sell or assign. If they do, they have to give notice, but this basically says don't do that for purposes of this law. And then also notify the debtor it has ceased all collection activities, and notify any credit reporting agency to which it furnished adverse information about such debt that the debtor disputes the accuracy of the adverse information. And that's consistent with the prior language. Subsection B is just getting at if not all of the informationrequired informationis provided, what's considered adequate documentation, what needs to be in the statement of forced debt, or if it's provided orally and it's required to be written. This is basically just saying, if that's the case and the creditor does not decide to cease such collection activities, then within ten business days of receiving the notice of the coerced debt, the creditor shall inform the debtor that additional written information is required and shall provide the debtor with model form A1. The original language just said, shall tell the debtor everything you need to submit, and then talking it over. Somebody has a lot of information. And just to make it really clear that the debtor, in fact, receives all of the information, understands what needs to be, that they'll be given a copy of Model Form A-one. Then, within thirty days, so once you have the statement and the adequate documentation, the creditor shall complete a review of all of the information provided by the debtor and any other relevant information available to the creditor, and upon completion of the review, make a determination as to whether to accept or dispute the accuracy of the debtor's statement of forced debt and notify the debtor in writing of its determination and the good faith basis for such determination. So require written notification about the determination and also a rationale that's for the decision, a good faith basis for that determination. So once that review and determination is made, then the creditor has five business days to either: one, if the creditor accepts the accuracy of the statement of forced debt, the creditor shall then contact the consumer reporting agencies that received this adverse information and request such information be deleted from the debtor's file and credit report. Or, conversely, if the creditor disputes the accurate statement of forced debt and, as a result, will recommence collection activities against the debtor. The creditor shall provide the debtor with written notice of the debtor's right to request reconsideration of the creditor's determination as provided in subsection C, which we'll get to next. So the reconsideration is new, and then also the prior draft, it wasn't really clear what happens if the creditor disputes the accuracy of the statement, whether the creditor would need to enforce in a court of law or whether the debtor would enforce. So most of the laws that I look at, at least Connecticut, New York, and Illinois, essentially say the creditor can resume collection activities subject to uncared debt collection practices. So all of those protections would be there. But they can't garnish wages unless they go to court or take other legal action unless they go to court. So something to consider one way or the other. It just needs to be clear what the creditor can and can't do. So then in terms of Oh, I read that wrong. I should see it in there. Should wear these. So the reconsideration: For within thirty days following the date of mailing of the creditor's determination, the debtor may request that the creditor reconsider its determination to recommence collection activities. A debtor requesting a reconsideration shall be permitted to submit additional documentation. And then within thirty days after receiving that, reviewing all of the information, including the new information submitted, shall make another determination. Any further reconsideration of the creditor's determination shall be at the discretion of the creditor. And then this So this is all new. This was something that was in the New York law, so something to consider, but basically stating that submitting a request for reconsideration of a creditor's initial determination is not a required condition of initiating a cause of action, getting a declaratory judgment that it's court's debt. Sometimes if there's an appeal process in law, claimants are required to fully go through that appeal process, usually in administrative hearings, before they can file an action in court. And this is just saying that you don't have to go through the reconsideration request. You can just go directly to court.

[Rep. Michael Marcotte (Chair)]: The reconsideration is the reconsideration only if they have new additional information?

[Maria Royal (Legislative Counsel)]: Not necessarily. It says they can. Presumably, maybe they want to make a stronger case, or maybe there's something that they because they'll get the good faith basis for the determination. But if think there's something in there that's overlooked or misunderstood, they can clarify. So I think they don't necessarily. But certainly, if they have other supporting documents, they probably want to submit it.

[Unidentified committee member (bank/credit union background)]: I think I understand where you're going. And to reconsider, we probably should have additional information to provide to get that reconsideration. But could that be something that the company could require?

[Maria Royal (Legislative Counsel)]: So you could, so maybe it's a distinction between, so this says, you know, including any additional adequate documentation, Maybe you could broaden that so it's not just limited to you have another document. It could be another rationale or other facts. That's up to you. If you want to broaden it or any additional information not provided or any rash however you think could probably.

[Rep. Michael Marcotte (Chair)]: I think we wanna make sure that it's fair to both sides, that if a creditor determines that it's not coarse debt, I wanna make sure that debtor is not just pushing things off. It's all plastic. Yeah. But I wanna make sure also that if you have other information, whether it's documentation, maybe another witness, anything like that, that they have that ability to present that as well. So I wanna make sure it's even on both sides. Do you wanna comment later? No. Well, mean, guess on On the reconsideration. Yeah, so it's not the same. I'm familiar with sometimes procedures for reconsideration. Affected individual will make their initial statement. And then they'll come to someone who might know a little bit more about the subject matter and maybe there's not additional facts, but they do a better job of relating, of talking about the situation and why it might be a good question and consideration. So, it might not just be the additional information. It may be you found someone who is better articulate in terms of writing or whatever. I don't know what happens here, but I know what's happened before. Yeah. So, I mean, I agree. Can we broaden that so that I mean, we just wanna we wanna make sure that people aren't gaming it. Yeah. Yeah. And that whatever they're when they request a redetermination that it's legit.

[Maria Royal (Legislative Counsel)]: So it's

[Rep. Edye Graning (Vice Chair)]: pretty broad. I don't know

[Maria Royal (Legislative Counsel)]: if it's too broad for you. So when you request the reconsideration, you shall be permitted, not required, to submit additional documentation. Oh, no. Thought it was including in here. Oh, no. No. No. Sorry. Sorry. Sorry. Yeah. She'll be permitted to submit yeah. I think it's confusing because it says the documentation, could be considered adequate documentation, just those documents. So additional information or documentation or some that would be the broadest.

[Rep. Michael Marcotte (Chair)]: Like a significant change in situation. I don't want to get that.

[Rep. Edye Graning (Vice Chair)]: An individual does this on their own, and then goes and gets more support, and they did it with the help of somebody who had never done it before, and it got turned down. And then they found an organization, or somebody in the organization who was helping them that had actually done this before and was able to really put all the information together. This allows for that, right? So for the most part, we're dealing with situations where people are They may not have all of their stuff. They may have left someplace without all of their things. So they may have trouble right, like having all of the things that they need in one place. So it might be harder for them to get all of that the first time. So I'm good with it being pretty broad, and I fear that we don't want this to be a delayed tactic either.

[Unidentified committee member (bank/credit union background)]: I think I'm not reading it wrong, but the company has some leeway on that as well. Because you're re reviewing something, even if it's a you know, additional comment on it, it doesn't necessarily mean that. Yeah, I think I don't I don't know if you have to have I don't think you do need additional documentation or I think been part of this process before.

[Rep. Edye Graning (Vice Chair)]: I think you're from the Bank of Credit Union.

[Unidentified committee member (bank/credit union background)]: Think that.

[Rep. Michael Marcotte (Chair)]: Mhmm. I think you had it right, those areas, information.

[Maria Royal (Legislative Counsel)]: Including an amended statement or I

[Unidentified committee member (bank/credit union background)]: mean you can reverse a decision by having a conversation with somebody and see without additional information that's coming in, just a simple conversation.

[Maria Royal (Legislative Counsel)]: Section F. This just specifies that all communications from the creditor to the debtor under this section shall be made using only the debtor's preferred contact method and in addition, the creditor shall make every reasonable effort to use the debtor's preferred language. So, not requiring the creditor to use the language, the preferred language, but putting the onus on the creditor to try to. And then what's stricken is if the creditor provides oral interpretation services or otherwise communicates with the debtor in any language other than English, the creditor's communication shall be in the debtor's preferred language orally or in writing, except as otherwise provided in the section. So it's breaking that and just saying make every reasonable effort to use the preferred language, always use the preferred contact.

[Unidentified committee member (bank/credit union background)]: So that could mean that the the company would have to use email communication if that's what the person requires. I I don't know if that's and I can understand, like, a specific address, but to make it specifically email where it's not all that secure, I mean, granted, you know, people could argue that mailing is, but I I think companies would prefer to make that decision of whether email or mail. I don't know if you wanna specify that. I wouldn't feel comfortable specifying that knowing the process.

[Rep. Edye Graning (Vice Chair)]: Like, it will be a word. Okay.

[Maria Royal (Legislative Counsel)]: Subsection G, I think there were changes here. This is just about in connection with any statements. The creditor shall not disclose the contact information the debtor provides in the statement to any other person, including perpetrator or joint account holders without the debtor's express written authorization. That's all the same unless directed to do so by court order. Subdivision two is the same. This is just the creditor may request the identity and address of the perpetrator, which the debtor does not have to provide if the debtor signs a sworn statement that disclosing such information is likely to result in abuse to the debtor or to a member of the debtor's immediate family. So that's pretty consistent with what you had before. So then, subsection H, this is one of the subsections as Curtis spoke about. So this now provides that model form A1 shall be developed by the Commissioner of Financial Regulation, posted and no longer in 12 most common languages in Vermont, of English and Spanish on a publicly accessible website maintained by the Department and the affirmation, and shall be substantially in the following form. So then just looking through the form

[Rep. Edye Graning (Vice Chair)]: Can I just make a comment? We heard from the department that they're working on access. They're not going to testify today, probably, but they're working on getting access to more language translation. They don't have it now, but they're going to do their best with that as they go forward. But to put it in law, to require them to do something they can't do yet doesn't seem to make sense.

[Rep. Michael Marcotte (Chair)]: So

[Maria Royal (Legislative Counsel)]: just in terms of a supporting document, yeah?

[Rep. Michael Marcotte (Chair)]: Can I go back again, just one page? Page 11, I think. In the paragraph in the form, you've given us information, blah blah blah. If someone used your personal information without your permission, and it didn't we exclude that from the definition of coercion?

[Maria Royal (Legislative Counsel)]: Yeah. You don't think I do it. If we can have it to someone who's using the. No. You're right. That gets more to the identity theft.

[Rep. Michael Marcotte (Chair)]: Okay.

[Maria Royal (Legislative Counsel)]: Unless we hear otherwise, I will scrape that. This also just saying for supporting documentation on page 12, please include any one of the documents below that show that the debt was taken off by someone who you were in an use of relationship with. Just a little bit too narrow. So striking that, so it's clear, you might not have necessarily been. So these are the documents. So these, I believe, now should sync up with what the changes were in the definition of adequate documentation. So removing an identity theft report. Most of it is already pretty consistent. It includes the court appointed special advocate. These are now qualified third party professionals, so just including that here in the model form. Just notification to the debtor within thirty days, notify that the creditor will stop attempts to collect the coarse debt, notify in writing that they're stopping to collect the debt, review your claim, make a determination as to whether you should be relieved from liability for the course debt from the creditor's perspective, so whether they're gonna no longer enforce or try to collect. Sorry. I think I lost my question. It'll come back. Just contacting consumer reporting. Having them remove the information from the file and credit report. There's a consumer file, then there's the actual report that goes out. Just making clear. Remove information from both. And then this was just adding to this model form that goes out to all debtors. If you are communicating with us by email, please confirm with us by telephone our correct email address for submitting information about the debt so we can ensure a timely response. There was a concern raised by the bankers that lots of employees of banks have email addresses and just not wanting it to get lost. So some kind of just confirm that you're using the right email address so we can respond timely. So

[Rep. Michael Marcotte (Chair)]: You're confirming with the financial institution. I

[Maria Royal (Legislative Counsel)]: I have a statement.

[Rep. Michael Marcotte (Chair)]: This is your email address. This is the correct one to use. Yes.

[Maria Royal (Legislative Counsel)]: Yeah. Some way of making sure it just doesn't get lost. The concern from the creditors perspective was they might be hit with all these violations because they just didn't realize they hit from it. So some trying to tighten

[Rep. Michael Marcotte (Chair)]: that up. It could be in multiple email addresses. I wanna be sure that they have the correct one. Evelyn?

[Rep. Edye Graning (Vice Chair)]: I was

[Rep. Emily Carris Duncan (Member)]: wondering if when this Or in the event that this goes out to the public, do we wanna differentiate or explain to the public the difference between identity theft and coerce? I understand that there are lines to it in statute, but in practice and practicality, I could imagine a person that may be the victim of identity theft thinking that it could possibly let injurious college fit.

[Rep. Michael Marcotte (Chair)]: I think that's why we're removing.

[Rep. Emily Carris Duncan (Member)]: I understand that's in the statute, but how are we communicating that to the public?

[Rep. Michael Marcotte (Chair)]: I think that'll be it. The advocates are there to help and I think they'll know the difference. They can tell them where they need to go. It's identity theft. You go to the AG. If this is coerced that it's brought to the FR.

[Rep. Emily Carris Duncan (Member)]: Do you think that still applies in the event that a person's handling the filing themselves?

[Rep. Michael Marcotte (Chair)]: I think if they're filing wherever they file it, so if they file this with DFR and DFR is going to look at it and say, No, this isn't an entity. Well, I think I would look at it.

[Maria Royal (Legislative Counsel)]: I mean, you couldn't say that. You could reference that this claim relates to somebody unauthorized using your information without You need to follow the identity theft.

[Rep. Michael Marcotte (Chair)]: In the form.

[Rep. Emily Carris Duncan (Member)]: In the form. Yeah, I'm just thinking for folks that are also going through a potentially highly emotional time,

[Rep. Michael Marcotte (Chair)]: are they going to clearly figure out? The

[Maria Royal (Legislative Counsel)]: CFR won't review the forms, the creditor will. And they could conceivably say, if the Fedor doesn't know that that's even an option, they think, oh, I don't qualify.

[Rep. Michael Marcotte (Chair)]: I think a good idea is It slows the process down if they don't understand.

[Rep. Edye Graning (Vice Chair)]: We're requiring a third party professional to certify this, though. You can't really do this on your own, right? An individual needs a third party. That's true. Still

[Rep. Michael Marcotte (Chair)]: won't hurt anything, think, by putting it on the form, because they're gonna take time to fill the form out, then they've gotta find a third party. If they already know, before they fill the form out, that this is not course data, it's identity theft, and maybe there's something in there on the form that tells them where to go if it's identity theft. Yes.

[Maria Royal (Legislative Counsel)]: So not too many changes with respect to civil legal remedies, just tightening up the language a little bit, specifying that if you're actually in a civil action, the creditor has the burden to disprove the debt by preponderance of the evidence, which is default standard of proof in a civil action. Again, just tightening up the language. Subsection d. Oh, okay. So the language that's headed here, can see in bold. You had civil legal remedies, and then you had creditor in a separate section, but they kind of overlapped. So in this draft, what you see highlighted here came from the creditor remedy section, and now that section is deleted. So because you're kind of talking about the same thing. So nothing in this sub chapter diminishes the rights of a creditor to seek payment recovery from the perpetrator. This language is modeled after what was in its own separate section, but now it's just in the general civil legal remedies section. And so proposal, then that brings us down to the bottom of page 13. What was subsection F? These were proposed penalty provisions. So proposal to strike those. Under the Consumer Protection Act, there is a private right of action. You're entitled to collect your damages. You're entitled to collect trouble damages, punitive damages, as well as your attorney's fees and costs. So just defaulting to what is the existing private right of action for consumer protection violation. And then g is the the final subsection that was in the stand alone creditor remedies, and now it's just all, like I said, in one section of law. The creditor remedies, you can see those subsections are deleted, that whole section. So, a new confidentiality provision. Three subsections: Except as otherwise expressly provided in the subchapter or required by law, any financial and personally identifying information related to a claim of coarse debt that shared by a debtor pursuant to the provisions of this subject or shall not be disclosed by the recipient without the expressed consent of the debtor. Any privileged materials, so attorney client privilege or healthcare privilege under federal or state law that's shared by a debtor under the term shall not be disclosed unless the debtor expressly waives the privilege or the privilege is waived by an express provision of law. And then this is the subsection that gets to what Chris Curtis was talking about: Any records or information produced or acquired by a public body, which would be subject to the Public Records Act. Under this subchapter, to the extent it contains financial or personally identifiable information, shall be kept confidential and exempt from public inspection copying under the Public Records Act. And then it goes on to say, this exemption shall not be subject to and I think that's the requirement that public reference act exemptions are reviewed every five years. I was just saying, you don't need to review this. And, again, Chris talked about the debt collection rules striking this section. They already have rulemaking authority. And then finally, I think this might be the last oh, no. Two more things. This was just this is under the state fair credit reporting act. This is just specifying that in this section that concerns disputed claims,

[Unidentified committee member (bank/credit union background)]: also give

[Maria Royal (Legislative Counsel)]: a four set so it doesn't get lost because it's all the way at the bottom as it was in your prior draft, and really just trying to make the language conform with the other provisions of the subchapter. So intention to make a substantive change here. So then, just in terms of the application, it still takes effect 07/01/2028. It shall apply for all Forest debt, including Forest debt incurred prior to July 1.

[Rep. Edye Graning (Vice Chair)]: So the question I have is about timeline. I haven't seen any references to a time period in which so for example, if somebody is

[Unidentified committee member]: submitting for coerced debt, is there any timeline? No. Thirty days. Days.

[Maria Royal (Legislative Counsel)]: The creditor to review

[Unidentified committee member]: the No, no. What I meant was when the, for example-

[Rep. Michael Marcotte (Chair)]: Statute of

[Rep. Edye Graning (Vice Chair)]: limitations. Yeah, the statute

[Unidentified committee member]: of limitations is what I'm There

[Maria Royal (Legislative Counsel)]: is a default statute of limitations. I'm not sure where it is, but that's a good point. Do you want to You actually raised something that I was thinking about. If you want Some states toll the statute of limitations while this process is happening. Right? So don't know if this is a six six year statute of limitations. I'd have to confirm. I just don't know. But if you want to, in any way, address that or toll the statute of limitations while there's a review, you can do that so that the clock doesn't run while a debtor is in the middle of this process. That's that's how it's come up in other states, but if there are other issues around the statute of limitations, do that.

[Rep. Michael Marcotte (Chair)]: This is gonna wind up going to judiciary.

[Rep. Edye Graning (Vice Chair)]: K.

[Rep. Michael Marcotte (Chair)]: That probably should be something that we include, and then they can work on They can determine. We just went through that on the board yesterday. Yeah. I mean,

[Maria Royal (Legislative Counsel)]: it's a

[Rep. Michael Marcotte (Chair)]: good point.

[Unidentified committee member (bank/credit union background)]: I mean, you can be in a an abusive relationship for for longer than six years. I'm not I'm not saying that we shouldn't have a statue. I just something to think about.

[Rep. Emily Carris Duncan (Member)]: You also may not find out about the course that three, years to come.

[Maria Royal (Legislative Counsel)]: So I'm not a judiciary attorney. They would know this right away, but I I think there's a you know, from the date that you became aware of. Right? So but don't touch me on that, Charlie, but that there might be some.

[Rep. Michael Marcotte (Chair)]: Okay.

[Unidentified committee member]: Questions about, and I think this is just sort of broadly, maybe not related to the language. But I have questions about I was trying to think through all the various different sorts of debt it could be, and how that the ten days and the thirty days, and what are timelines that wouldn't line up for that or that would be problematic. And I think maybe it'd be helpful to hear from people who do debt collection. Have a

[Rep. Edye Graning (Vice Chair)]: whole list to hear from right now.

[Maria Royal (Legislative Counsel)]: Okay. All right.

[Rep. Michael Marcotte (Chair)]: I'll back up. I got lots

[Unidentified committee member]: of questions, but maybe it's not about the language. The only other

[Maria Royal (Legislative Counsel)]: thing I'm gonna say really quickly is I think the language could be a little bit clearer about the debtor having a cause of action, like just stating that more explicitly for a declaratory judgment that it's implied. And then also, some state law specify that a perpetrator is not a necessary party for a debtor or creditor trying to seek a judgment about the debt. In other words, a debtor doesn't have to bring in the perpetrator to prove their case if it's not. Both of those, you could read them in the most broadest remedial sense, but I think it could just be a lot clearer.

[Rep. Michael Marcotte (Chair)]: Yeah, how long is the, yeah, the peak?

[Rep. Edye Graning (Vice Chair)]: It's so long.

[Maria Royal (Legislative Counsel)]: I mean How long would you like it to be? I could be very fast. Do you wanna do a quick run through, like, just to see it and make it a sense of what you wanna do, or do you just assume?

[Rep. Michael Marcotte (Chair)]: What is your time frame after the floor?

[Maria Royal (Legislative Counsel)]: I'm going be around for a while, so I can come back after the floor.

[Rep. Michael Marcotte (Chair)]: We've had some people scheduled on this piece, but I'd really like us to at least take a look at that language so that we see it and then we can digest it. We take continue to bake this so that we can get this out next week.

[Rep. Edye Graning (Vice Chair)]: Okay. Yep. Hopefully, have another.

[Rep. Michael Marcotte (Chair)]: Hey. Chris? Good

[Chris D’Elia (President, Vermont Bankers Association)]: afternoon, committee, mister chairman, madam vice chair. How are you?

[Maria Royal (Legislative Counsel)]: Better than you. Glad to see you.

[Rep. Michael Marcotte (Chair)]: Well, you don't look too bad. You're you're cheering and

[Chris D’Elia (President, Vermont Bankers Association)]: It's a good day to sit up and take nourishment. Let's just we'll leave it at that. But I appreciate the opportunity to Zoom in.

[Rep. Michael Marcotte (Chair)]: The first day?

[Unidentified committee member]: We're happy not to see you.

[Chris D’Elia (President, Vermont Bankers Association)]: Right. Well, I'm happy not to give this to you. My wife and my wife and daughter that my grandson can't go to school anymore because that's where he got this and did five of his family members.

[Rep. Michael Marcotte (Chair)]: Always

[Chris D’Elia (President, Vermont Bankers Association)]: fun. Let me start with for the record, Delia, president for Vermont Bankers Association. I think this is the first time that I've testified on this issue, on this bill. So what I'd like to do is just keep it at a high level because Maria who was working far too late last night sent the draft to me and I had a chance to go through it this morning and get it out to some folks And I'm still getting some feedback and my commitment to you, Madam Vice Chair, is to make sure that I get that feedback wrapped up by the end of the week and by tomorrow night or Saturday at the latest, you've got any additional comments that I've got on the bill so we can keep the process moving forward. But let me begin by saying this is really a difficult topic since we first learned about this back in November '24 and engaging conversations. We've, we know that it's really, really difficult. And we heard that last week with some of the testimony that was provided in particular. I'm thinking about the example, that was offered by Legal Aid, and I'm sure that's just one of many tragic stories of victims that are out there in Vermont. As I was listening, two things came to mind. The first is I'm a father of four daughters who thank god have never found themselves in such situations. That said, they've educated me over their adult lives pertaining to some of the difficult challenges that they face both in social and business settings. Fortunately, no threats of violence, but difficult nonetheless. If it were threats of violence, I may not be sitting here right now. I might be sitting in a little place with four walls and some bars because that won't fit well with me. The second is several decades ago, I was clerk of the works for a construction project. I will not say where, but it was involving a shelter for women experiencing domestic violence. And while I never met any of the women, I was educated by the staff of that organization on the vital work that they do to help not only the women experiencing it, but the children of women and giving them a safe place to go. I mentioned these because it's it's been, the testimony that's been presented, I wanna assure you, is not falling on deaf ears. We wanna find a solution to help the victims. And and, again, I wanna say that loud and clear. We want to find a solution to help the victims. Every banker who I've spoken to is horrified by the by the experiences the debtors are potentially enduring or have endured. We agree that something must be done to address the financial circumstances that they find themselves in. However, during many discussions, either leading up to the study committee or even during the study committee, we were questioning whether there was any data that was pertaining to Vermont, even just an estimate so that we could understand the scope of the problem. But to my knowledge, data was never provided even to the study committee. And while we heard testimony, last week of an analysis and circumstances in Texas, For me, that's not adequate. For my members, it's not adequate. We'd like to get a sense of how big an issue this might be in Vermont because that's critical to knowing how this bill potentially plays out. As you've heard, legislative counsel and and I thank Maria very much for the work that she's done on this bill as well as the transaction holds provided a very nice detailed walk through on the changes that have been made compared to the bill that was introduced. I want to state that those changes are a big step in the right direction when it comes to providing help for the debtor, but also a more balanced approach to the financial institutions that have to respond to the claims of court's debt. That said, I'm still in the process of reviewing this latest draft and again plan to have comments to you Madam Vice Chair no later than tomorrow or Saturday. In the big picture, I just want to share what our areas of concern have been. When we look at the bill as it was going through its development and even to some extent now, it does shift the burden of analysis to the financial institution with only the data provided by the debtor. We are only given a limited amount of time to review that data and come to a conclusion. And if the financial institution doesn't agree, we have to go to court to disprove the debtor's claim. That's an interesting concept that some of my bankers have never heard about and some of their lawyers have not heard about. We kind of wonder how that would even be feasible given we only had the information that the debtors provided. Every banker that I've spoken to said, well, we probably won't deny the claim because we're subject to civil remedies or or potential penalties under title nine. And for us, the concern is that may open up the door for more fraudulent claims. Banks will be responsible for writing off losses in the case of secured assets, unsecured assets, or excuse me, the case of secured assets, the expense of also trying to reclaim that asset. I wanna stop there and say we greatly appreciate you eliminating mortgages from the draft of the bill. We greatly appreciate you dealing with the concerns we have on commercial loans. I I might add one proposal there, and that's in statute. There is a definition of commercial loan, which we would suggest referencing as we did with the mortgages. But again, how is that done if the bank so we get to trying to reclaim the asset and the concern is how's that done if the bank isn't provided with the name of the perpetrator. Now again I want to acknowledge clearly we understand the risks to that debtor and to the family members, and we would not wanna put them in that risk. But the challenge we face is the bill will enable us to go let's hope the bill will enable us in the end to go after the perpetrator. But if you don't know who they are, that's tough. And we're not sure from a legal perspective if they haven't signed the loan documents, if they haven't signed the contracts, a credit card application, how are they party to this contractual relationship, what gives us the legal authority to go after them, whether that's addressed here or whether it's addressed in judiciary, that is a concern that we have. Finally based on unknown losses or even estimates there is concern on the part of my members that access to credit underwriting and the pricing of that credit is going to change in the marketplace depending on what the outcomes of the the debtors claims over time. Underwriting processes may change, cost of credit may change because you're having to account for an unknown of who could ever determine whether the loan we're making today may be raised at some point to be coerced debt. And if we make any of those changes in the underwriting of pricing, it has to be done across the board. It has to be done in a fair way that is not in violation of fair lending practices which we are obligated to uphold. So I want to stop there and just close with this. Again, it looks like many of the changes that you've addressed here would address some of the concerns that we have had with the draft 1.2, and we greatly appreciate it. I want to be able to continue my review, and I will get as I did to you the committee members and to the chair and vice chair kind of a page by page, line by line if we have any additional concerns. Very quickly, if you're going to shift to transaction holds later on, let me just say that I want to thank Maria. I want to thank DFR. I want to thank Jonathan Cooper for getting us together and the work that we've done to put into that language. Having reviewed the draft that Maria made available, I think it was yesterday, that draft looks very very good and I think can be a very useful tool for financial institutions and more importantly offer opportunities for protecting victims of scams out there in the marketplace. How it proceeds in the legislative process leave to you attached to this bill or another one standalone but I just wanted to chime in and say we greatly appreciate the work that's gone on in that and with that I'll stop and answer any questions that you might have and my intent is certainly to be available to you via text, email, or I will haunt you in person on Tuesday when I'm back in the state house.

[Rep. Michael Marcotte (Chair)]: Provided you're not contagious.

[Chris D’Elia (President, Vermont Bankers Association)]: Yeah. I had I plan on it. I know.

[Rep. Michael Marcotte (Chair)]: I thought. He like you sharing, but not everything.

[Chris D’Elia (President, Vermont Bankers Association)]: Yeah. Thank you.

[Rep. Michael Marcotte (Chair)]: Any questions for Chris? K. We look forward to other edits you might have. Yeah. Certainly appreciate the back and forth, everyone's willingness to work together on this.

[Chris D’Elia (President, Vermont Bankers Association)]: Thank you. I appreciate it as well. In particular, madam vice chair for her work on this.

[Rep. Michael Marcotte (Chair)]: Colin, I don't know that did you wanna

[Colin Hilliard (Advocacy Director, AARP Vermont)]: I have some comments for the course that I've put, but I also have

[Rep. Michael Marcotte (Chair)]: Well, and we'll ask you back for the because we haven't even looked at the language yet.

[Colin Hilliard (Advocacy Director, AARP Vermont)]: Thank you for allowing me to speak here. Colin Hilliard, the Advocacy Director for AARP Vermont. It's good to be back in this committee with you all. AARP is supportive of both remedies and protections for victims of coarse debt, and also the bank holds for suspicious activity, which you're going to hear about a little bit later. I really appreciate of this committee's work to strengthen protections for victims of exploitation. Financial exploitation is the most frequent form of elder abuse among passive neglect, willful deprivation, confinement, physical, sexual, and emotional abuse. About one in ten older Americans experience some form of elder abuse, but only one in twenty four cases of abuse are reported to authorities. Older adults are highly likely to be financially exploited by someone that they know, so from friends, family, service providers, caregivers as well. And as a result, that can make their ability to pay for necessities such as food, rent, healthcare, extremely difficult. And this can push older Americans into poverty and homelessness and raise the likelihood that older adults are having to rely on public assistance. To speak specifically on the coerced debt provisions here, identity theft and coerced debt have been the most common types of fraud that are reported to AARP's fraud watch network hotline. That's our one-eight hundred number that we try and get the word out there as much as possible to senior centers around the state. We work with the Attorney General's office on that as well, and it's staffed pretty much 20 fourseven. And we receive hundreds of thousands of calls a year from folks to that network And CoorsDet and identity theft are the top thing that hear from folks calling it. And you don't have to be a member to call into that. That's out there for everyone. And it's actually in partnership with the Colorado Attorney General's Office. Core stat is particularly problematic for older adults whose incomes typically decrease as they leave the workforce and through retirement, disability, and medical conditions, and it greatly limits their ability to recover lost income or rebuild their credit scores, something that I think is really important when we talk about older folks and how they're affected by this. Broadly, we're really supportive of the direction in this bill and still kind of digesting these latest changes. So I want to keep it pretty high level, and I know too we're coming up on the House floor, but I did want to just flag for you all two areas of concern from us. And so one of those being a lot of the changes we saw on page eight, nine, and 13 around allowing creditors to determine how the debt was coerced. And so this is still kind of digesting this from our policy folks, but seems a little bit different from the intent that we initially read around, you know, suspending liability when the debtor establishes the case with their coerced debt claim. And so, having to prove that with a preponderance of evidence in court when they have so essentially, yeah, we see this as adding a lot of confusion in the process, and I'm happy to share some language from our folks that I'm still waiting for on what we've seen in other states on how to kind of clarify that. Another section, also the exemption of debts that have already been part of a final judgment and a disillusion or collection, that's on page two, lines fifteen and seventeen. Certainly understand the concerns around opening up a case that has already been litigated, but we had two really clear examples that we wanted to share with and just make sure that folks understand the implications of this in some cases. So, one being an older person with a diminished capacity who is being financially exploited. They don't know what to do with the notices that they've received from a collection agency, and so this becomes subject to a default judgment, and they're being exploited. But now that that judgment's made, there's no recourse for them, so bill wouldn't apply to them. Another that I wanted to touch on was, you know, if someone is in a marriage and, you know, you're a victim of abuse, agrees to disillusion where, you know, each party is responsible for their own debts just to get out of the marriage as quickly as possible and in a way to, you know, get to safety and whatnot. Both of these cases, the bill is written with exempting debts that have already been part of that financial judgment, they would not have ever recourse here in in our rating of this. So that explicitly stating that is is different from, some of the model bills that we've seen, and worked on in other states, so I just wanted to to call that up. I think those are the two big things for us and wanted to keep it relatively high level again. We are also still working through the really substantive changes in the last draft and happy to follow-up with the committee with those. And then also have a lot more on suspicious transaction points. We were part of that the working group for that, and and a lot of really good work was done, and we're really hopeful that that will move in some form, whether it's this bill or another.

[Rep. Edye Graning (Vice Chair)]: K. Questions for Colin?

[Rep. Michael Marcotte (Chair)]: Great. Thank you. Thank you. Have about five minutes. Grace, did you want to

[Maria Royal (Legislative Counsel)]: think she's watching the live.

[Rep. Edye Graning (Vice Chair)]: Was she on live? And she was going to jump in when it was returned. Here? Katie is on Zoom.

[Katie McKenzie (survivor testifier)]: I'm sorry. I couldn't hear you guys. Hi, Abbey. Hi.

[Rep. Michael Marcotte (Chair)]: We have about five minutes.

[Maria Royal (Legislative Counsel)]: Okay, I'll go quick.

[Rep. Edye Graning (Vice Chair)]: Thank you.

[Katie McKenzie (survivor testifier)]: I'm Amy McKenzie, I live in Washington County. I'm a survivor of domestic violence. I want to first thank you all for the work you are doing on H 385 to give survivors of First DEA a real path forward. It is really important. My former partner used economic abuse as a way to control me, to keep me from being able to leave safely with my three children. He took money from my bank account without permission, wrote bad checks in my name, stole belongings from our home and my home Can after

[Grace (last name unknown)]: you all hear me?

[Rep. Michael Marcotte (Chair)]: Sorry, Grace, we moved on to the next presenter.

[Grace (last name unknown)]: Oh, my apologies.

[Rep. Michael Marcotte (Chair)]: That's okay. We're about out of time anyway. We'll invite you back again, but we take this up next week. Go ahead, Katie.

[Katie McKenzie (survivor testifier)]: He took the van I depended on to get my children to school and activities and refused to return it until he totaled it. Even after I left, the financial abuse did not stop. For more than a year, he continued to stalk me and used our shared children as a way to maintain power and control over my life. He forced me to pay his household bills using my credit card when I could not afford it. When I tried to say no and stop that, he became aggressive enough that I feared for my safety. He threatened to move to New Hampshire during this time and I understood that as a way to pressure me to continue paying. I felt like I had no choice. Leaving did not leave did not end the abuse. It just changed the form that it took. I left four years ago and I'm still living with the financial consequences every single day. Over the course of this abuse, I was forced into more than $20,000 of debt. I had to take out a high interest loan simply to cover basic living expenses for me and my children. This affects my children in real ways. Their father and I agreed to split the cost of an art camp for our daughter. When he did not pay his share, I could not cover the difference. She had to leave the program. This is what economic abuse looks like years later. I now live in a 500 square foot home with my three children. We need more space, but I cannot qualify for a home improvement loan. I once had excellent credit and abuse destroyed it. The impact of economic abuse goes far beyond the debt itself and that is true for many survivors. But H385 would allow a meaningful step for people like me to rebuild stability, independence, a safe future for our children. Thank you for taking the time to listen. If you have any questions, sorry, had to be rushed.

[Rep. Michael Marcotte (Chair)]: Thank you, Katie. And we are certainly sorry for your experience. Any questions?

[Rep. Emily Carris Duncan (Member)]: Emily? Katie, thank you very much for sharing your story. I'm Emily Carris Duncan, I represent Wilmington, Westingham and Halifax. I'm so sorry to hear what you're continuing to go through. Do you have any thoughts on the statute of limitations for this bill? Do you have any thoughts on

[Rep. Michael Marcotte (Chair)]: I

[Colin Hilliard (Advocacy Director, AARP Vermont)]: mean, obviously,

[Katie McKenzie (survivor testifier)]: I won't fall under that statue if it's six years. Separated from my children's father in 2022, I'm still suffering with that debt. I'm doing my best to overcome it, but like that's something I wouldn't be able to benefit from and that's okay but I worry about you know other people. I think the statute of limitations being if it was six years would not cover a lot of people And there's people out there who've been through a lot worse than I have. So, yeah.

[Rep. Emily Carris Duncan (Member)]: Thank you. Appreciate that.

[Rep. Michael Marcotte (Chair)]: A question? Katie, thank you very much. Committee, I have to get to the floor. Let's back immediately after adjournment. Back in here so we can hear the second piece of this consumer protection that they're trying to do. Sooner we're in here, the sooner we're out of here. So with that, we will be back immediately after the floor concludes so we can go off live chat here.