Vermont Legislature SmartTranscripts:

[Speaker 0]: Good afternoon, everyone. This is the Vermont House Committee on Commerce and Economic Development. It is Wednesday, 03/11/2026 at 01:02 in the afternoon. We're here to continue discussions on h c 85, again, an act relating to remedies and protections for victims of coerced debt. So we have Rick Segal from the Kansas City Council office, who's going to give us a little reminder of how debt collection works from the court of federal law. Good afternoon.

[Kirk Siegel (Office of Legislative Counsel)]: Kirk Siegel with the Office of Legislative Counsel. Page three eighty five, I don't have any written testimony or any evidence because my colleague, Mary Royal, is working on the bill. I can't really even too familiar with the bill, but I've been asked to come today to answer questions and give a brief overview of debt collection because it is a consumer protection issue and that's mostly in Title IX,

[Rep. Ian Goodnow (House Judiciary Committee)]: the Fed spent a lot

[Kirk Siegel (Office of Legislative Counsel)]: of time in Title IX, And I'll just kind of give you which and I don't know if you've heard of this yet, so forgive me the hurdles. But for the most part in Vermont, debt collection regulation is under the consumer protection, which you've heard me talk about in this committee time or two. So you go back to the unfair and set back in commerce that is considered where the regulation for debt collection is. So if a debt collector, which I'll show you how Vermont computed, if a debt collector is engaged what Vermont deems to be harassing conduct or stalking one of these categories of areas that Vermont says this is consumer protection, then a consumer can go through the agent's office to have that debt collector investigated, have some type of litigation proceeding on behalf of the consumer. There's not really any statute that's specific in Title IX to debt collection, it is through the Consumer Protection Act. So the AG's office I share in my web browser here is showing you that the AG's office does have general information about debt collection. You've probably seen this if you look up Debt Collectors Vermont, you will find this web page. And you see some of the basic principles that debt collectors can't do in the state. And I understand one question you all have is, does a debt collector and community reverse employment creditor?

[Speaker 0]: Is that correct?

[Kirk Siegel (Office of Legislative Counsel)]: Does that sound familiar? So based on my view of the definition, which these are the rules that the AG has adopted in Vermont. Look at the effective date, 1974. They're older, now maybe they've been updated since then, but originally 1974, unless I totally can't find the newest version, this is my interpretation of news rules. At the very bottom you have definitions of the various entities in this process. So I read the word debt collector as means any person engaging or aiding directly or indirectly in enforcing claims and includes creditors and their agents when they are so active. To me, that's fairly clear that that includes the first party, the creditor that incurs the debt or that you incur the debt with. I also would include the third party that the creditor sells the debt to if they have some

[Speaker 0]: kind of

[Kirk Siegel (Office of Legislative Counsel)]: relationship where they sell that debt. So federal law does not include it by the way, under federal law, the first party, the creditor is not subject to the Fair Debt Collection Practice Act.

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: Yeah, do you mean CPA? Yeah, that

[Kirk Siegel (Office of Legislative Counsel)]: federal law does not explicitly include those first party creditors, but Vermont does and states are allowed to give consumers more protections than federal law provides. I'd be curious to hear if the AG has an opinion on this. I don't know if you've had testimony from the AG as to whether they agree that this definition includes, I think it does based on reading it, it's their rule. So I'd be interested in that, but they gave a question, Mr. Chair.

[Unidentified Committee Member (Commerce & Economic Development)]: Their rule, which means they can change it.

[Rep. Ian Goodnow (House Judiciary Committee)]: Right.

[Kirk Siegel (Office of Legislative Counsel)]: And the rule is based on the Consumer Protection Act. So pretty broad authority to change these rules, how how they wish. Of course, it goes through the legislative LCAR process, but that's up to them if they want to update that rule. In theory,

[Unidentified Committee Member (Commerce & Economic Development)]: if we wanted to add a definition for a debt collector to pull that into statute, we could do that. That would

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: be okay.

[Unidentified Committee Member (Commerce & Economic Development)]: I'm just thinking on this bill, it technically is germane. Yeah, would be worse than we would have to have conversations about this. It would slow the process. Never mind. I answered it.

[Kirk Siegel (Office of Legislative Counsel)]: So here again this is back to the AG flood page. This is very appropriate rules. So if you don't think you have enough information here about the protection of consumers based on those rules. If you want to know more about the federal laws, the Consumer Financial Protection Bureau has pretty good information online. The law is, I think it's a law from the 1970s, the FDCPA. However, the rules were last updated just a few years ago, but it mirrors Vermont's in a lot of ways. But again, I think what this committee questions about was that, know, do debt collectors include that initial creditor? Federal law, no. State law, state rules appear to be yes. But if you look at the how often can they contact you? Did you know they can contact you on social media? I didn't know that, I read that today, but they are allowed to. But of course, if you contact them,

[Unidentified Committee Member (Commerce & Economic Development)]: you tell them do not contact me on social media, they can't,

[Kirk Siegel (Office of Legislative Counsel)]: but the consumer has to be proactive in that to prohibit that. So there's a lot here, so that's why I can't give

[Rep. Ian Goodnow (House Judiciary Committee)]: you the detailed analysis, and most of

[Kirk Siegel (Office of Legislative Counsel)]: them travel the law. However, if you have questions, I'm happy to maybe answer them now, probably answer them via email later or tomorrow.

[Unidentified Committee Member (Commerce & Economic Development)]: My understanding of the Fair Debt Collection Practice Act also makes it so that if you request no contact, they can't

[Speaker 0]: contact you.

[Kirk Siegel (Office of Legislative Counsel)]: They can still contact you, but it has to be, I think the next step is a letter telling you what the debt is. You've asked us not to contact you, and this is what we're going to seek, either going to file a lawsuit or going to do something. So there is that kind of stop, The consumer has to make that clear in their notification that we think this debt is not legitimate, x y z. There are letters that you can download, like templates that you can send to a debt collector that enforce those rights you have on a federal line, probably stabilize you. But so it's not a complete stop of contact, but they will cease the harassing.

[Rep. Ian Goodnow (House Judiciary Committee)]: Is there a definition for harassment?

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: Are

[Unidentified Committee Member (Commerce & Economic Development)]: they allowed to send letters at that point? For some reason I always thought it was once you send the letter, they don't correspond with you.

[Kirk Siegel (Office of Legislative Counsel)]: So I can't say that's totally true because there is at least one and more contact that they can tell you what their next step is. If it's litigation, if it's they're going to call up to them, whatever they want to do. After that, I don't know, can get back to What tells they must stop doing that they're allowed to call you once a week, once every month. Don't think they can. But that letter has been sent.

[Unidentified Committee Member (Commerce & Economic Development)]: Yeah. I definitely telephone, I think it's it's over with.

[Speaker 0]: Anything else?

[Kirk Siegel (Office of Legislative Counsel)]: Not for me unless you know.

[Speaker 0]: That's where it is.

[Kirk Siegel (Office of Legislative Counsel)]: You can always, if the committee wants later on, suggest a bill that would either require Vermont to update the rules or would place some more guidelines because right now the aging is pretty wide latitude on the rule making so Yes.

[Speaker 0]: Are

[Maria Royle (Office of Legislative Counsel)]: you there?

[Speaker 0]: It's been a long time.

[Rep. Abbey Duke (Member)]: Sure has.

[Maria Royle (Office of Legislative Counsel)]: Feeling like I'm in withdrawals, having daily contact over last week. So Maria Royal, legislative council. I'm going to walk through the latest draft review, which is draft 1.16. For those who've been following along

[Speaker 0]: with

[Maria Royle (Office of Legislative Counsel)]: judiciary, yesterday, judiciary review draft 1.15, you're going to hear from members of the judiciary later, this draft is exactly the same, with one exception, and that is that it includes a proposed definition of good faith. So just wanted everybody who's been following along or looking at yesterday's updated draft. So, as noted, revisions from judiciary are highlighted in yellow. Revisions from this committee are in gray, and I'll touch on the judiciary issues so you're familiar with them as we go through. Ian can also speak to them as well. So first, the definition of coerced debt, which is described for reference the exclusion of final judgments from the definition. That was something that the Vermont Bankers Association suggested that they no longer needed to do that. And that's because under the civil remedies section, a court has the authority to vacate any prior final judgments in the event that there's a finding in force that. So the thought was it's no longer necessary here. There's a proposal to include a new definition of what's termed future abuse. This comes up in the context of a debtor not wanting to disclose the identity or contact information of the perpetrator

[Rep. Abbey Duke (Member)]: out of concern, some kind

[Maria Royle (Office of Legislative Counsel)]: of retaliation from the perpetrator. So, they wanted to be more specific about what kind of abuse or harm is contemplated, and so they use the term future abuse, which means abuse is defined under Title 15, and that's the domestic violence definition of abuse. As you have referenced here, except that the abuse may not occur between family or household members. So just broadening the definition. So, as I mentioned, a new definition for you to consider, and that's of good faith. And the proposal is to cross reference a definition under the Uniform Commercial Code. And that definition, I'll just read it to you. Good faith, except as otherwise provided in Article five of this title, means honesty in fact and the observance of reasonable commercial standards of fair dealing. And I'll also just note that that definition is used as a topic for Article four of the UCC, and that's the article that deals with bank deposits and collections and customer rights with regard to a bank. So, like that. And then under qualified third party professional, just some proposed language here that came from the Vermont network, just to more accurately define who a crisis worker is and broaden it to make sure it is inclusive enough. So a crisis worker, as defined as a detailed child, employed at a program, survivors of domestic violence, sexual assault, stalking, human trafficking, or abuse of children, and who has relevant training or expertise. So then, there was a proposal, and I wasn't sure if the committee had made a decision but this is with respect to the creditor's determination after they've done their investigation. I'm in Substitution B, July 13. The creditor shall provide,

[Unidentified Committee Member (Commerce & Economic Development)]: or July 12,

[Maria Royle (Office of Legislative Counsel)]: the creditor shall notify the debtor of such determination in writing and shall provide a good faith, that's where

[Unidentified Committee Member (Commerce & Economic Development)]: the term goes with these,

[Maria Royle (Office of Legislative Counsel)]: basis for the determination and a proposal to strike, including identification of the evidence reliance. And then I believe the committee decided that if a creditor determines that the information presented does not establish that the disputed debt is forced debt, the creditor may recommence collection activities. However, the creditor is prohibited from selling, assigning, or otherwise transferring the debt, so they would have to keep it. So just some updates to the model form to reflect those changes. So to temporarily or permanently stop collection, as opposed to what it said before was just to stop election. And other changes were made to conform with the definitions as well. And then also, within thirty days that we receive this information, we will do all of

[Unidentified Committee Member (Commerce & Economic Development)]: the

[Maria Royle (Office of Legislative Counsel)]: following. We're no longer saying stop all attempts to collect or accept from you. Just go right into notify you in writing that we are stopping all attempts to collect the debt from you pending our review of your claim. And further on, actually in subdivision three on line eight, it's the provision where the creditor would request that the information be removed from the credit report if they find that it is forced to, or alternatively, they have the option of challenging their claim in court. Under the civil legal remedies, this is just a technical change, so if the court finds a debt is forced debt, the court shall vacate any previous default judgment issued against the debtor on the horse debt, just making it a little bit tighter. These are the potential protections that a debtor can request from a court.

[Cheryl (Policy Director, Vermont Network Against Domestic and Sexual Violence)]: So if a debtor signs

[Maria Royle (Office of Legislative Counsel)]: a sworn statement that disclosing the identity of and contact information for the perpetrator is likely to result in future abuse to the debtor or a member of the debtor's immediate family, the creditor may file a motion to request the hearing to determine the danger of future abuse to the debtor or to a member of the debtor's immediate family. And then in such an action, the debtor shall bear the burden of proving by its preponderance of the evidence that if the debtor discloses this information, the perpetrator poses a danger or future case to the debtor family. Subsection E, just striking, presiding because it's not necessary, and then these are the This just refers to all of the measures a court can take, sealing records, allowing for remote hearings to protect the data. Noting that, not necessarily all of

[Rep. Ian Goodnow (House Judiciary Committee)]: them, but some of them.

[Rep. Abbey Duke (Member)]: Then,

[Maria Royle (Office of Legislative Counsel)]: we go right along. Think we get all the way to, we go through the suspicious banking holes. Now, the last section, you have asked that there be some kind of data collection and report back once this section becomes effective, which is 07/01/2028. So at that time, the Commissioner of Financial Regulation shall study the utilization of the force that protections and remedies codified in Section one, essentially. In conducting such study, the Commissioner shall consult with representatives from the Vermont Network, the Vermont Bankers Association, Association of Credit Unions, the Attorney General's Office, the Legal Aid, and any other person deemed appropriate by the commissioner. Among other things, the study shall include an assessment of earlier state claims with regard to your frequency, creditor investigations, the presence of fraudulent or illegitimate claims, the challenges experienced by debtors or creditors in exercising their rights under the applicable sub chapter, any other matters being probed and appropriate. And then, the initial report shall be submitted on or before 11/15/2029. Findings and recommendations shall be submitted in direct form with the relevant committee for clarification. And then just because of this new section six, we just went through including that in the effective dates. Questions for Maria?

[Speaker 0]: Before we have others, I would representative now to come in get a judiciary's proposal, and then we can hear from everybody else so that we're talking about everything in the bill.

[Maria Royle (Office of Legislative Counsel)]: I don't know if Charlie's text page right now. I'll go down. I'll If

[Speaker 0]: Jonathan is after the committee of suspension. Oh, perfect.

[Rep. Abbey Duke (Member)]: Sorry, I'll ask. I'll find someone else to ask.

[Speaker 0]: Can I ask where are you? So

[Rep. Abbey Duke (Member)]: I have a question. It's kind of going back to this is not part of the recent edits, but the definition of debt and who the potential creditors are. I've just been trying to think through all the different scenarios of who could My reading of this is this definition of the creditor could be anybody, person or business, that is owed money. Is that an accurate? Yeah. So it could be got it. So it's very broad. Okay. Thank you. So we've been mostly talking about banks and credit unions, but potentially that is a very broad category of people. Thank you.

[Speaker 0]: Thank you. Thanks, Maria.

[Kirk Siegel (Office of Legislative Counsel)]: Now I'm back for a moment. So

[Rep. Ian Goodnow (House Judiciary Committee)]: hello, everyone. My name is Ian Goodnow. I am a rep of Brownboro in District 9. I am

[Unidentified Committee Member (Commerce & Economic Development)]: the lowly junior, junior member of

[Rep. Ian Goodnow (House Judiciary Committee)]: the House Judiciary, who is here to answer your questions and give you a little info on what we've done on H385. I apologize for my voice. I've lost a little bit, but I just took a cough drop, so it's really pumped. Mr. Chair, I wanted to check-in how you'd like me to do this. I'm happy to talk about the process that we did, or else I can just answer questions.

[Speaker 0]: I think it'd be great to let us know what judiciary looked at and your reasoning for making the changes.

[Rep. Ian Goodnow (House Judiciary Committee)]: Yeah, absolutely. I

[Speaker 0]: love

[Rep. Ian Goodnow (House Judiciary Committee)]: the talk, so it's a great opportunity. Judiciary looked at the definition section as it relates to the section on the civil legal remedies, which I'm looking at draft

[Unidentified Committee Member (Commerce & Economic Development)]: 1.15, which I don't think I

[Rep. Ian Goodnow (House Judiciary Committee)]: don't know if that's the same one that we're looking at.

[Speaker 0]: We have 1.16. Yours hasn't changed.

[Rep. Ian Goodnow (House Judiciary Committee)]: Yeah, which starts on page 14. So there were some definitions that were important for the legal remedies section. Probably the most important one was the new definition for future of use, which is on page three. I really like it when we're able to reference existing law, and I think this does it quite eloquently. We pull from 15 BSA ten-eleven-eleven-eleven, which is domestic abuse definitions. And what we did was basically put that definition and said, it's going to be that abuse, but it doesn't have to relate just to a family member to make the abuse, which is what the definition being as subsection of. So we're not rewriting anything. We're kind of outlining what we need to cross reference. So that's very important because if you were to go to the civil legal remedy section, which you both spent the majority of my time on, one of the things that we were looking at is a question around disclosure of the perpetrator, of coarse debt. And one of the questions was whether there is a risk of future abuse. And so that was something that we spent the time on. But beyond the other definitions, a couple things around,

[Rep. Herb Olson (Member)]: To make sure I got

[Speaker 0]: Please. Okay, so we're going to referencing statutes that describes what abuse is, but that statute says it's between family members and we're here saying plus, and not just that, all the things, all the activities, but not limited in the relationships. Yeah, yes. Okay, I think I got it.

[Rep. Ian Goodnow (House Judiciary Committee)]: Yeah, and the idea here was that the perpetrator And that's not the word we actually use here, right? It's the What do you perpetrator? The perpetrator in this bill could be someone who's totally outside of the family dynamic. So we wanted to make sure that the definition of future abuse didn't curtail that type of perpetrator who was not domicile. But beyond that limiting language, that definition is very good, and that's why we want to use it. Does that answer your question? Why is it future abuse, not just abuse? Why

[Unidentified Committee Member (Commerce & Economic Development)]: is the term the interbind?

[Rep. Ian Goodnow (House Judiciary Committee)]: Because this is And that's where I was going next. So the civil legal remedies section is the why it came over to house judiciary. This is a court process for what happens, essentially, if the debtor, the creditor can't come to an agreement, and now we're in the court to essentially figure out what's going to happen. So that's a court process. That's judiciary. That's why we're there. And we spent a long time looking through the structure that you guys proposed. Looks pretty good as far as the standard that you established, that it's got to be the proponents of the evidence, that you create a prima facie case for the debtor, which we talked a lot about. It's a policy decision, but I think understanding what this bill was trying to accomplish with trying to take some of the burden off of credit, the debtor who is a victim of coarse debt, creating a simpler way to at least establish a pre deficient case makes sense to us. And so we didn't really change much of that. Where it really got tricky was the question around disclosure of the perpetrator to the creditor if coarse debt was found to have happened, right? So you've gone through this civil process. The court has adjudicated that, Yeah, we got coarse debt. And now creditor is like, Great, I want to collect against the perpetrator. There's the bad guy. Want for him. And there was in the language that you sent over to us, there was a of a less clear way of exactly how a perpetrator may not be disclosed to the creditor. So we really worked on that section and tried to clarify a court process for determining whether disclosure of the perpetrator should happen or not. That's where we get the future abuse because we wanted to talk about the question of, okay, what are reasons why the perpetrator should not be disclosed should be if there is a risk of future abuse. Whose burden is it to determine whether there's a risk of future abuse? We put it back on the Denver. So now, as you'll look through, this is on page 15 of my draft version. Basically, we've said that it's going to be a motion, so the debtor needs to move the court to allow for the perpetrator to not be disclosed, and you'll see the burden proving that beyond the prudence

[Unidentified Committee Member (Commerce & Economic Development)]: of

[Rep. Ian Goodnow (House Judiciary Committee)]: the evidence that the debtor discloses the identity in the common provision of the trigger, it poses a risk of future abuse to the debtor or to a number of the debtors to be found. So that puts it back on the debtor. It gives the creditor an opportunity to have this procedure in court to determine whether this perpetrator should be disclosed or not. Final thing that we've worked on that probably going on way too long. Final thing that told you I love to talk about. The final thing that we kind of talked a little bit about was in the language that you sent over to us, there were some procedures that would suggest that the court could take or protections the court could implement to protect a debtor, and the issue there was I've seen it before, subsection on page 15. So the issue with the language that was sent over to us once, it kind of just gave the court some sort of direction that they could do some things, but didn't make it clear, like, who was asking the court to do that. And the court the judiciary doesn't just sort of do things without being they are a neutral body, and they need to be moved by a party to do things. And so we reworked the section to say, Okay, the debtor can ask the court for these different types of protections. And then at the very end, we made it very clear that the debtor can also seek an RFA, a reframe of abuse order, but that we're not asking this civil court to impose any kind of foreign pay protections because that's not an appropriate venue for that kind of objection. Yeah, and then we made some other changes here and there, but those are the big substantive discussion points that we had. It's a great bill. And we heard testimony about how important this type of work, this type of bill is for certain individuals. It could be life changing to be alleviated of some amount of debt. While it wasn't really clear from the testimony that I heard exactly how many people that would be in Vermont, the fact that there's absolutely a possibility that could be life changing, really, in my personal opinion, is very meaningful, good work. And I think

[Kirk Siegel (Office of Legislative Counsel)]: that was reflected in the straw poll that

[Rep. Ian Goodnow (House Judiciary Committee)]: we took, which was nine zero two. I anticipate that the other two probably would

[Unidentified Committee Member (Commerce & Economic Development)]: have voted in favor of

[Rep. Ian Goodnow (House Judiciary Committee)]: it being a very much a mouthful decision.

[Speaker 0]: Think you were too clear and too thorough. Rutgers, I'm draining.

[Kirk Siegel (Office of Legislative Counsel)]: Oh, here's the question. Thank

[Rep. Edye Graning (Vice Chair)]: you, Ian. I really just wanna say thank you to your committee, to you. Well, yeah, because this is, I think, how we work together to get bills passed. We didn't have the expertise to understand how to work this through the courts, but your committee clearly does. And so I just appreciate it when it goes well. And I think that when we are able to do that, it gives all of us hope that we can keep doing it more going forward. So, and just to be clear, I am sick and stayed home and wore a mask yesterday. I didn't just take a cough drop or anything. I'm just kidding.

[Rep. Ian Goodnow (House Judiciary Committee)]: No, I really appreciate it, and I appreciate the judiciary having enough time to work

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: on it.

[Rep. Ian Goodnow (House Judiciary Committee)]: We are slow sometimes in getting things like that. And Martin would have loved to have been here. He's working over on landlord tenant, which has taken up a lot of our time. So I'm sorry we replaced it for you.

[Kirk Siegel (Office of Legislative Counsel)]: I appreciate the time.

[Speaker 0]: Herb? You have a question?

[Rep. Herb Olson (Member)]: It was just a question to keep him talking,

[Speaker 0]: but we really don't do that.

[Rep. Herb Olson (Member)]: I

[Maria Royle (Office of Legislative Counsel)]: was gonna say, are you just using him?

[Unidentified Committee Member (Commerce & Economic Development)]: All right.

[Rep. Ian Goodnow (House Judiciary Committee)]: Okay, thank you so much.

[Rep. Abbey Duke (Member)]: Great to

[Unidentified Committee Member (Commerce & Economic Development)]: see you all. You.

[Speaker 0]: Cheer along and thank you to your committee.

[Rep. Ian Goodnow (House Judiciary Committee)]: I absolutely will send those along. All right, have a great rest of your day.

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: I did. You'd think I did.

[Speaker 0]: Very fixed with Todd.

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: Good afternoon. Todd Davis, Assistant Commute General of the Attorney General's Office. Mostly here to answer any further questions, but let me start by saying agreeing with Representative Goodnow, this is a really good bill. Think there's been a lot of work put into this bill. You all are well aware of the history, the working groups. Folks on that, the director cap, Chris Curtis has been well involved in this. He's not available today. And so we continue to support it. We support the direction it's

[Speaker 0]: moving in.

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: I'll leave it at that unless there are questions Yeah,

[Unidentified Committee Member (Commerce & Economic Development)]: so if I send a letter, are you guys interpreting as stop communication?

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: You mean under this bill?

[Speaker 0]: Well, the underlying, the rules that you had.

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: So here's what I found out of that collection. A little bit is personal history, so when I was originally at the AG's office fifteen years ago, we were involved in debt collection. That's when the police come. When that question was brought to me, I reached out to folks on consumer division. We really have not engaged in any debt collection work. Worked with certain debt collectors around debt adjustment, but even that work has really tailed off in recent years. We haven't, I don't think we've been getting complaints around it, and so we haven't been putting resources towards it. So I think it's a fair question about what we would do in that scenario, and I think it's pretty theoretic that's the only issue. I think we would hold off and let this process play out because it's more clear to be found here.

[Speaker 0]: Just a question for me, are you looking at an industry that you want to see be able to continue functioning? Haven't quite been able So

[Unidentified Committee Member (Commerce & Economic Development)]: the reason why I'm asking is because we're talking about relief from creditors. And currently, it's set up where it still stays in the creditor spot. And if the debtor can send a letter, cease communications. The only thing that's left is just on the credit report, which doesn't go all the way that some folks want, but it certainly will not having to get phone calls, not having to get even letters in the mail, it could provide a ton of relief on that level. And I just want to, if it's not something in current practice, I'm thinking that maybe we should add that in there because that would meet the need of debtors, right? Because they still have the debt and they can go after it through court. Creditors. Creditors. Sorry, that's what I meant. But it still provides that relief. It's not relief from the debt, but it's relief from the Experience. Experience of of it. And at that point, I assume that the creditors would put a note on it that it's being contested, which would also lend to the ability for a debtor to attempt to get manual underwriting for loans. And I don't know that process, but it's because people will provide credit to people under manual underwriting. So it's a little bit more cumbersome, but think to make it fair for everybody involved because the creditor didn't, it wasn't their fault. And if it was their fault, then shame on them and we should punish them. In these cases, it's not the creditor's fault and it's not the debtor's fault. So striking that balance, that's where I'm coming from in my thought process and why I keep asking that is because it does provide that relief and sometimes just not getting the letters, not getting phone call, it's there, you know it's there, but dealing with abuse, small little things bring it up over and over and over again. It's like when you go to a funeral. It's not just the funeral of the person that you're going to, but it's also all the funerals that you've been to, the loved ones that you've been

[Rep. Ian Goodnow (House Judiciary Committee)]: So that's what I think.

[Rep. Herb Olson (Member)]: So

[Rep. Abbey Duke (Member)]: spent I some time with this bill trying to think through various scenarios and how they would play out. And so my question has to do with creditors who aren't banks. They're not lending institutions. A creditor, let's say it's a contractor. And there's an allegation of forced debt to a small business that had a contract to provide the service or whatever. How does that play out?

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: So it may turn to Maria in terms of how

[Kirk Siegel (Office of Legislative Counsel)]: I was going to do

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: what I think she's doing right now, just look at the definitions.

[Kirk Siegel (Office of Legislative Counsel)]: Because I square up where

[Rep. Abbey Duke (Member)]: I tried to go back and look at definitions and your answer before, and it seems like the creditor is very broad. It could be a person. It could be a contractor. It could be a small business. So I'm concerned about unintended consequences in those sort of more formal and informal types of credit. I guess that's a Maria?

[Maria Royle (Office of Legislative Counsel)]: Was going say you're right that creditor is very broad to be defined. I think what might narrow it a little is the definition of forced debt, which means all or a portion of secured or unsecured debt solely or jointly in a debtor's name, whether it's something like a lien based on the other if need this.

[Rep. Abbey Duke (Member)]: Right, so if a scenario like that where it's a contractor who is looking to get paid and then, They could put out a lien. They could just be trying to collect a debt.

[Rep. Ian Goodnow (House Judiciary Committee)]: Do you need to go through court to get a lien? No? I don't know.

[Rep. Herb Olson (Member)]: I

[Rep. Abbey Duke (Member)]: guess it's just a concern I have about what is potential effect to small businesses.

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: One thing I would say, Mr. Jean Duke, is looking at, as Maria suggested, looking at debt, there's, of course, debt. It's got to be debt that's incurred as a result. And I think the goal is to give people relief from debt that was incurred as a result of domestic abuse. So the nature of the creditor matters less than how the debt was produced. And that would seem to me the bill is appropriately agnostic on

[Unidentified Committee Member (Commerce & Economic Development)]: who you are in that.

[Rep. Abbey Duke (Member)]: Right, it just puts a risk onto, right?

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: It does, but it also, I would say, my understanding is provides an avenue for protection relief for creditor.

[Rep. Abbey Duke (Member)]: Understood. Yeah. But wait, because then, I guess explain that.

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: My understanding is the creditor could then, once it's proven to be coerced death,

[Unidentified Committee Member (Commerce & Economic Development)]: they can go after the perpetrator.

[Speaker 0]: After perpetrator.

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: I think part of the whole book to the network and folks advocating this is that there is at least broader knowledge and understanding in the commercial space around awareness around your worst death and being And

[Rep. Abbey Duke (Member)]: then another question I have has to do with the I know we talked about it early on about secured debt versus unsecured debt. So if it is secured debt, It's a little bit unclear to me whether or not that can the creditor go after what has been secured with the debt? You see what I mean? Let's say it's

[Rep. Ian Goodnow (House Judiciary Committee)]: a car or a house. The house

[Rep. Abbey Duke (Member)]: is around that's different. But a car is a great example. And I know we talked about an example of the car is gone. That's different. Let's say the car is there, And there's this process of saying they filed the paperwork to say this is forced debt, but the car is there. Can the creditor repossess the car? And then the remaining if there's a balance left on the car, that's what's remaining for the coer's debt? But if there's not you know what I mean? It just doesn't say it in the bill, or I

[Maria Royle (Office of Legislative Counsel)]: couldn't find it. Yeah. So let me ask them to address that one. It's on page 14, subject to eight, right

[Rep. Ian Goodnow (House Judiciary Committee)]: at the

[Maria Royle (Office of Legislative Counsel)]: top of the paper. So with respect to the works that secured by tangible personal property, nothing in this subchapter shall affect the creditor's right to enforce security interests upon results, repossession, surrender, or court ordered seizure of the subject collateral. Okay. However, a creditor is prohibited from collecting or seeking to collect any deficiency from the victim of course debt. Okay. So they get the collateral and it's not enough to satisfy the debt.

[Rep. Abbey Duke (Member)]: Okay. So they can repossess the car. They can. But if there's a thousand dollar difference, they could not. Okay. Great. That makes me feel better.

[Maria Royle (Office of Legislative Counsel)]: Yeah. If there's a finding of course that.

[Rep. Abbey Duke (Member)]: Okay.

[Unidentified Committee Member (Commerce & Economic Development)]: Great. If they determine that it's course that.

[Speaker 0]: Right.

[Rep. Abbey Duke (Member)]: Okay, and I got one more question. This is maybe for you too, Maria, which is going back to, I've been noodling on this sort of that, I've forgotten what it's called exactly, the qualified third party professional, which has just bothered me since the beginning. But I'm wondering if the voice written right now, it seems like that qualified third party professional could be from anywhere in the country, right? Would it make sense to have it be, it's gotta be a Vermont licensed professional or third party? Good question. Yeah.

[Maria Royle (Office of Legislative Counsel)]: Really? You know, just where it is narrowed a little bit, just get on page five, the third party professional has to sign a sworn certification for penalty of perjury. Page six, that you are a qualified third party. You've had in person contact, well, face to face contact through an electronic medium, so for the Zoom, and then based on those professional interactions, a reasonable basis to believe. So those are the parameters. You're right, it doesn't specify. It's a Vermont. But in

[Rep. Abbey Duke (Member)]: this scenario, could you move to Nevada and then file a course debt claim? Could Could you you file for a course debt in Vermont from another state? The debt was acquired in Vermont, and then you move across the country for legitimate reasons. And then you want to file for court debt in Vermont, and you use a qualified third party professional in Nevada and file it in Vermont.

[Maria Royle (Office of Legislative Counsel)]: So you're getting into jurisdictional issues at the court. But I think if your debt is in Vermont and the creditor is in Vermont, there's probably jurisdiction.

[Unidentified Committee Member (Commerce & Economic Development)]: And

[Maria Royle (Office of Legislative Counsel)]: then otherwise, I'm not thinking that my mind isn't thinking fast enough, I don't see anything in here that limits your ability to consult a professional in another state, but you still have to have the documentation. It's all filed here. It's all filed. Okay.

[Speaker 0]: And could that person who's licensed in Nevada sign the affidavit that says that they're qualified third party professional as defined in IDSA. I think that's your question, Right. So would that mean that that person that moved to Nevada would have to find a qualified third party in Vermont?

[Maria Royle (Office of Legislative Counsel)]: Sorry. Are you saying can you meet the definition of law that third party added to the court, you're an attorney, you're if you can be out of state and make this definition or leave.

[Speaker 0]: Think that's pretty much a question of people practicing whatever, whatever the qualified people are that live in another state, would they be under our jurisdiction when they sign this and swear to it that

[Rep. Abbey Duke (Member)]: they could do that.

[Maria Royle (Office of Legislative Counsel)]: Not for licensing purposes, but they'd be subject to her attorney if they sign a document and submit it to a court. Mean, I think probably one good example might be if somebody's seen a professional at capacity in New Hampshire,

[Unidentified Committee Member (Commerce & Economic Development)]: right? That's the

[Maria Royle (Office of Legislative Counsel)]: practice there, you know, would you want to restrict those professionals from being able to sign or not? I think that's a policy question. You have more jurisdiction over the people you license, but there might be reasons for having.

[Speaker 0]: But there also could be found that they purged themselves. If they're from another state, I would assume that there would be some record that would go to their licensing division in that state. And I think no matter what, there's gonna be consequences if they're not licensed in the state. The Nevada example exists for the Massachusetts example exists for people in Stanford, should So still to think, but it doesn't make

[Rep. Ian Goodnow (House Judiciary Committee)]: the chain of consequence would reach

[Rep. Abbey Duke (Member)]: to professionals. I hear that. I've just always struggled with that third party professional definition because a lot of these third party professionals, their job is to advocate for their client, right? And so they are not looking at it from an impartial standpoint. They are saying, you know, my preventable judgment, I support this claim. But they're not really, I don't know. I just think that third party professional attestation is not really that high of a bar. And so I don't know.

[Speaker 0]: I hear what you're saying, but I don't think that people that are licensed aren't going to put their license on the line and perjure themselves to help somebody.

[Rep. Herb Olson (Member)]: I kinda agree with that. I think that the safeguard, I think, is mostly around the militarization and perjury issue, no matter where the heck in the country you live. I also worry that if you're limited just to Vermont professionals, you can be really posing a real problem to the victim. Because they might have a relationship with the professional in Hanover or something. And that person may be the only one who really, they have a relationship with and knows the facts. I I get where you're coming from, but I'm confident that the polarization and poetry thing is good enough, I'm really about the consequences of just learning a little. We

[Speaker 0]: wanna be able to go

[Rep. Herb Olson (Member)]: out to the app before you string them up, right?

[Unidentified Committee Member (Commerce & Economic Development)]: And just to add to what Herb was saying, I think it's also important that in the event that

[Rep. Herb Olson (Member)]: everyone

[Unidentified Committee Member (Commerce & Economic Development)]: has been working through this issue with somebody that's at work, it also corrects some amount of credit. I can imagine being in this position, it's incredibly emotionally outrageous, it gives you This has potential of giving you a full picture of what that person has been through as a result of having been a victim of corset. So I think having that at this stage is an important piece.

[Speaker 0]: Anything else for Doug?

[Rep. Herb Olson (Member)]: Thanks, Doug. Oh, I had one question. As far as study Oh, they can start with you. That's fine.

[Rep. Ian Goodnow (House Judiciary Committee)]: Just walk in.

[Speaker 0]: Karen?

[Unidentified Committee Member (Commerce & Economic Development)]: Do guys want to be together? I'll go first and then I'll pass it on.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: Okay. For the record, Joe Valenti, Director of Policy at the Department of Financial Regulation. I will speak briefly about the study requirement that was added in Section six, and then I'm going to hand it over to Aaron

[Rep. Ian Goodnow (House Judiciary Committee)]: for another aspect of the bill.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: But in terms of the study requirement, if it looks familiar to you, it was very heavily borrowed from Act 23 that was passed last year. Same stakeholders that were convened to do the report that we submitted back in January. Slightly different questions, of course, because we're trying to see how the bill is working out in practice. It's important to have a wide range of stakeholders at the table to do this because similar to what we discussed with the suspicious transaction holds, it's really hard to get a full picture of what's going on. Going back to something that Representative Duke had said earlier, there are a lot of different kinds of creditors. They may be banks. They may be credit unions. They may be non bank lenders. They may be debt collectors, etcetera. And some of these entities are under DFR oversight, some of them are not. And that's a point that Aaron will discuss in a little bit more detail. And so it's not as simple as can we just collect a copy of every form that was submitted, or can we just contact every single lender or debt collector that is out there? As we had heard earlier today, even debt collectors are regulated but are not formerly licensed. So the idea here is that we would get stakeholders together knowing that the banks and the credit unions would have a sense through their associations of what's happening, not just for the Vermont chartered banks that DFR has insight into, but banks and credit unions chartered in other states, as well as the national banks that are out there. And then for the other types of lenders, there are licensed lenders under DFR jurisdiction, but there may be debt collectors, others that where we don't have that level of visibility. We would also be able to get information from the advocates, the Vermont Network, from Legal Aid, to hear about how often are these things being filed, what is happening in that process. And the language is intentionally structured to really emphasize and assess both the debtor and the creditor's ability to exercise their rights on it. So in essence, we're bringing the band together again for another round of discussion and analysis. And it really does take that sort of mixed methods approach to be able to change as full a picture as possible. So that is the goal there. Any questions on that?

[Speaker 0]: Okay, well then I am going to

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: pass it back to Aaron. I did want to say before the break, we'd had a discussion around our authority and ability to be able to look at how the law is being implemented, look at compliance through exams. And I just want to level set with the committee about what we can and can't do in the exam process. And so to clarify our position on that, I thought I'd bring in the deputy commissioner who can talk more about how our exam process works. Thanks, Sher.

[Rep. Ian Goodnow (House Judiciary Committee)]: Good evening, everyone. Aaron Farrance, Deputy Commissioner of Banking at DFR. Joe took most of what I was gonna say,

[Unidentified Committee Member (Commerce & Economic Development)]: but I guess you did

[Aaron Farrance (Deputy Commissioner of Banking, Department of Financial Regulation)]: have some questions on the exam process. Let me, you know, I guess to just reiterate what he was saying, we only have oversight of the entities that have a license with us or a charter, I guess. So that is going be a small sliver of this activity. Mean, as it's written, anyone could move from another state and come to a bond and be a law resident, and they can still use these powers in the law. They may not really understand that. We do compliance exams of our licensed lenders and other licensees, credit unions, we're looking at a lot of different factors of their compliance with the law. We would obviously add this to

[Speaker 0]: of, to

[Aaron Farrance (Deputy Commissioner of Banking, Department of Financial Regulation)]: that that exam and say, all right, how would we test to make sure that they are complying with this? Ask them how many reports of course that have you received and how have you adjudicated those? Have you provided notices within those timelines and you complied with court orders and the the like. So I guess that's the real quick and dirty summary of really what our panelists would be. Happy to answer any questions on any part of it.

[Rep. Herb Olson (Member)]: So touching on two things, first, the exam authority. Sure. And then on the report and the specific items that you'd be studying. So the exam authority, are you saying that you'd look at compliance by creditors under your jurisdiction with the requirements of the statute? And I assume that would include the key. But one of the most important policy sort of features and protective features in this bill has to do with what happens when the creditor really doesn't think it's closed yet. And they are obligated under the bill to make a determination about that and a good faith determination, that's key for me. Would that examination, at least to the folks that you have jurisdiction over, your examination authority, I would think would look at, I mean, it's a key element of the legislation. It's where the rubber hits the mud road in terms of what the creditor is thinking and what the debtor is thinking. Would that be included within that exam?

[Rep. Ian Goodnow (House Judiciary Committee)]: Yeah, I would think it would. Mean, first step, like I said, would be like asking, how many of these cases have you experienced in the last year, two years, along the period we're looking at? And then delving further and saying, all right, by just examples of these, we don't have the resources to look at every single loan at every single lender base. Yeah, you do some risk focused. And

[Maria Royle (Office of Legislative Counsel)]: you probably

[Rep. Herb Olson (Member)]: pull it sooner.

[Rep. Ian Goodnow (House Judiciary Committee)]: If we found issues with

[Unidentified Committee Member (Commerce & Economic Development)]: it, we might delve further in other areas. Okay.

[Rep. Herb Olson (Member)]: It should, what the trial would do. So the other question, similar though, on the same topic in terms of the study, I see in the items that the study would address, there's got creditor investigations. And I'm just wondering if there would be helpful to have, because again, I think this good faith determination on the part of the creditors and more peace. I'm just wondering whether having something expressed in study around taking a look at those good faith determinations would be helpful in terms of you being able to shepherd that study.

[Rep. Ian Goodnow (House Judiciary Committee)]: Yeah, mean, I think we'll have direct ability to ask questions of our seven banks, at at that point, seven credit unions at the most. But I probably won't have insight into really what Citibank is. I don't have the ability to ask them for that information.

[Rep. Herb Olson (Member)]: I understand, but I think the way I understood the study and the

[Speaker 0]: people that were gonna be part of

[Rep. Herb Olson (Member)]: it, for the folks who don't have jurisdiction over you, you'd be relying on the network and other people to tell you about complaints around those issues. So that would be trying to backstop that.

[Rep. Ian Goodnow (House Judiciary Committee)]: Yeah, we would definitely rely on all of those partners. I still think though, to get the evidence from the creditor, we might be pulling our hair out, fortunately.

[Rep. Herb Olson (Member)]: You see, they'd say no

[Speaker 0]: to you?

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: If we go back to birth certificate suspicious transaction holds, we wanted to have the Vermont Bankers Association and the Association of Vermont Credit Unions at the table. Obviously, I cannot speak for them, but they would have visibility into their members who are not under our jurisdiction. And so it may not extend to the level of detail of having specific documents, but

[Rep. Ian Goodnow (House Judiciary Committee)]: if there were general high level concerns one way or another, my expectation would be those who would communicated to us. Yeah, will say I think those parties will be incentivized that if they're experiencing negative outcomes from this law, they would want to share with us through that process. So if they're, for example, experiencing a rash of blatantly fraudulent claims of coerced death, they would want to tell that to us and here it go, you.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: And vice versa, if it turned out that there was a lack of responsiveness, I would expect that

[Rep. Ian Goodnow (House Judiciary Committee)]: we would hear that from Legal Aid or the Vermont Network or others to that point.

[Rep. Abbey Duke (Member)]: So in your study and

[Rep. Ian Goodnow (House Judiciary Committee)]: the data collection, how would you collect data on creditors that you don't regulate? That's a really good question. In other circumstances, a few years ago we did the virtual currency kiosk study, we just sort of held public forums. We asked for a public meeting, or request public comments, those sorts of areas might be well. I don't know if there is any other lobbying group that might represent those interests that aren't included in that.

[Speaker 0]: I think it's into the scale. Bluebird was asking, you mentioned a small slice, I think was a phrase used for the curve here.

[Unidentified Committee Member (Commerce & Economic Development)]: Who's outside of your curve view? Mean, do

[Rep. Ian Goodnow (House Judiciary Committee)]: you feel that majority of the academic space? Yeah, I mean, just think of every national bank, every federal credit union really is outside our general scope. There are seven banks that are directly under our purview in Vermont, over 4,000 countries. So then you add in all of

[Unidentified Committee Member (Commerce & Economic Development)]: the stuff that are non bank type entities there.

[Speaker 0]: That was the part of this little part of it.

[Rep. Ian Goodnow (House Judiciary Committee)]: That was what was curious about, like non bank entities that was

[Speaker 0]: a structural part that industry. Looks like that But outside your purview,

[Rep. Ian Goodnow (House Judiciary Committee)]: you have to tell them. Yeah, mean, generally speaking, if you're in that industry and you're making a loan to a Vermonter, then you should have a license to do that activity in Vermont. Also that activity relates to mortgage lending. That is outside the scope of this, it's directly excluded. It's going to be a little murky, as I said, like let's say I was living in Texas at the time, this situation occurred in Vermont, presumably the law would give you these protections, it may not be some or a lender or some other claim.

[Rep. Abbey Duke (Member)]: Could we put in the report some kind of requirement that if somebody is claiming or going through the process to get relieved from that they have to notify DFR or they need to send that information somewhere so that there's a way to track? That's an interesting

[Rep. Ian Goodnow (House Judiciary Committee)]: question. It's not generally what we do on a regular We're not really set up for that. We do have a consumer complaint area that does field complaints for consumers that have been harmed by any entity under our purview, we could collect it in that way in general. If it's we do have reports, we can certainly report on that activity that we've received in that process. I'd have to think through if it would be appropriate for us to be sort of a repository of every single claim that's ever filled out in that case.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: And if it's a lender that is not in our jurisdiction, then

[Unidentified Committee Member (Commerce & Economic Development)]: we would not be able

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: to require that it be submitted to us. I think the other issue that I could see with that type of process would be if we were I think two things could happen. One is we are being inserted when we are not the right body to adjudicate. We can handle a complaint if one is filed with one of the lenders in our jurisdiction. The other piece would be I could obviously, we would take every precaution that we could to safeguard that information, but I could

[Rep. Ian Goodnow (House Judiciary Committee)]: see there being confidentiality concerns about a financial regulator having someone's very personal information when we really don't have a good reason for accessing. Complaints are within our privacy. Those are confidential.

[Speaker 0]: Question for air? Thank you. Chris, did you wanna weigh in, Charlie?

[Unidentified Committee Member (Commerce & Economic Development)]: Sure. Out of that line, anything to

[Rep. Ian Goodnow (House Judiciary Committee)]: say, but if

[Kirk Siegel (Office of Legislative Counsel)]: anybody has

[Chris D'Elia (President, Vermont Bankers Association)]: any questions. The record, Christina, Principal Bankers Association. If you have any questions, I'm

[Speaker 0]: happy to answer. I think one outstanding piece that we've overlooked now is the transaction piece that we have in the bill as well.

[Chris D'Elia (President, Vermont Bankers Association)]: The transaction holes? Poles, yes.

[Speaker 0]: So there was one something that Charlie had brought to us that we thought we should remove this, which is on page 23. That's section 2A, associated parties, talks about parent, spouse, adult child. I was talking about was that they could be the perpetrator. So suggestion was just wondering what your thoughts are.

[Chris D'Elia (President, Vermont Bankers Association)]: Yeah, well, obviously it's a policy question and it's a bit of a challenging one because they could also be a party that can be helpful to stop the victim from being victimized. I can appreciate that there is a concern that they might be the perpetrator, but if bank has the ability to call the daughter of a potential victim and that's not allowed due to privacy regulations that we have to adhere to, that party could stop that person from being victimized. Mean, there's two sides to that discussion. So I don't know how you're gonna manage that, but I think from our perspective, we're gonna wanna see a trusted third party identified by the account holder, that's who we would focus on, at least to get this third party piece into play to see how that evolves over time.

[Speaker 0]: I know, subsection B says an individual customer is authorized to be contacted by the customer's covered entity. Again,

[Chris D'Elia (President, Vermont Bankers Association)]: they could very much be a perpetrator if you got a bad sibling or son or daughter, but they could also be the person that's gonna help the victim not be taken advantage of.

[Rep. Herb Olson (Member)]: So there was a definition of good faith that was added to the first part of the bill. It references the FCC definition. Does that make sense?

[Speaker 0]: I reject? Any other questions for Chris? Thank you, Chris. Charlie, anything else you'd like to weigh in on?

[Cheryl (Policy Director, Vermont Network Against Domestic and Sexual Violence)]: Policy Director, the Vermont, the Fourth Against Domestic and Sexual Violence. I don't have anything else that I would need to weigh in on. I think our testimony around the portion of associated third party remains that if someone has not been granted permission to party's financial information, that they should not be contacted about it, and that in situations where there are suspicious transactions, we have concerns about perpetrators of abuse being contacted or potentially the child of a perpetrator of abuse. Family dynamics are very, very complicated, especially in the situations that are being addressed in this bill. We feel very comfortable with jury deed. Of course, there is potential for abuse in all of these third party definitions, but we think that the extra layer of granting a person access to your account information would provide some security for a survivor. And I would be happy to answer any questions on that piece or any other parts of the bill.

[Speaker 0]: Maybe just one more question for Chris, how are staff trained financial at institutions when I know they're trained into understanding what's going on, that this may be a suspicious transaction, and how are they trained to try to pull more information from the person coming in?

[Chris D'Elia (President, Vermont Bankers Association)]: From the victim? Yeah. So it's obviously looking at the behavior of the individual that's standing before you, it's looking at the transaction and whether that's an unusual transaction or not, and what that does is it sparks conversation between the teller and the victim, and if that teller feels that it's warranted, they will bring the branch manager over to continue those conversations, and it can also escalate to the security officer within the institution, and then the institution can also do the job with local, state, federal law enforcement to bring an engine. So all of that is part of the training process that goes on for frontline folks, that they know there's a series of steps how to engage the customer.

[Maria Royle (Office of Legislative Counsel)]: What about online transactions and things like that? There are plenty of vendor

[Unidentified Committee Member (Commerce & Economic Development)]: consumers that don't buy agency branches.

[Chris D'Elia (President, Vermont Bankers Association)]: There is, but obviously you don't have that face to face, so you are going to struggle with that level of engagement. At that point, if the bank sees something that's unusual happening, they will, my understanding is try and reach out to the individual. Yes, we often say your bank's not gonna call you and ask you to give this type of information because that's how fraudsters get. So it does have a higher level of understanding for the people who are looking at those online transactions within the bank, but it's not as easy compared to being face to face.

[Unidentified Committee Member (Commerce & Economic Development)]: And in the event that the bank kind of determines that some things pop, do they put a hold on you now? Well, if

[Chris D'Elia (President, Vermont Bankers Association)]: this goes through, we could have the ability to put a hold on it and gauge the customer, yes. If you normally do every two weeks, say $1,000 worth of transactions paying bills, and all of a sudden your online pops up and you gotta pick another $10,000 transaction, This bill would theoretically allow us to put a hold on that until we have an opportunity to chat with you and make a determination. Maybe you're taking money out of the big archers, or whatever it is, those conversations will go on, and if it's determined that we think there's fraud, the whole will stay on there until we meet the obligations under the statute in time for participation.

[Rep. Ian Goodnow (House Judiciary Committee)]: That understands now, if you can't get in touch with

[Unidentified Committee Member (Commerce & Economic Development)]: a person, it feels like, well, you can

[Rep. Herb Olson (Member)]: just talk through now. If

[Kirk Siegel (Office of Legislative Counsel)]: you can't get in touch with,

[Todd Daloz (Assistant Attorney General, Vermont Attorney General’s Office)]: I would assume you don't have that

[Unidentified Committee Member (Commerce & Economic Development)]: provision, If you're repeatedly trying to get in touch with a consumer, are there any actions that you can take that you cannot get in

[Chris D'Elia (President, Vermont Bankers Association)]: touch with members? Well, mean, again, the risk of if we can't get ahold of you, fifteen days hold is gonna drop off at the end of that period. But theoretically you've got your contact information with your small address looking at how, so hopefully you'd be responding

[Speaker 0]: to one

[Chris D'Elia (President, Vermont Bankers Association)]: of those things. Contact. I guess what I'm

[Unidentified Committee Member (Commerce & Economic Development)]: trying to think of is if somebody is in this abusive situation, that'd be, like, what is he called them or if they get hurt,

[Chris D'Elia (President, Vermont Bankers Association)]: you know? Are we talking about two different things? Are you in a coerced debt situation versus the transaction home or not?

[Maria Royle (Office of Legislative Counsel)]: It could be two

[Unidentified Committee Member (Commerce & Economic Development)]: different things.

[Maria Royle (Office of Legislative Counsel)]: They also dovetail, seriously. Yeah, they do.

[Unidentified Committee Member (Commerce & Economic Development)]: I think what you're referring to is the situation where, as you mentioned, the abusive, whoever's being abused is wanting to get out from under that, and that's gonna require them to make a large amount of money out. So you see they're taking $15,000 out, they're just trying to get money for a deposit on a new apartment so they can leave their spouse that's abusing them. You put a 15 day hold on it, now they're out of luck because you can't reach them.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: I think that's what you're

[Rep. Abbey Duke (Member)]: That trying is part

[Unidentified Committee Member (Commerce & Economic Development)]: of it. I'm also thinking about just like, I get calls from my bank if I spend a little bit up and over, their the department calls in and they will lock my stuff down if they don't respond in a timely fashion, so that's kind of what's going on.

[Chris D'Elia (President, Vermont Bankers Association)]: Well, think in the scenario you described, if it's of that level of importance, that person, if they're getting communication, is gonna wanna respond to the institution to share with them the circumstances at which they're taking those funds out in order to move on to something

[Rep. Ian Goodnow (House Judiciary Committee)]: better. So

[Unidentified Committee Member (Commerce & Economic Development)]: to me, what it sounds like is really, this is maybe something for the victim's advocates to say, look, it's great that you wanna do this, but make sure you let your bank know what's going on so that they don't flag it.

[Chris D'Elia (President, Vermont Bankers Association)]: I mean, the transactional hold is designed to stop fraudulent activity from occurring. And if those conversations are going on and the person says, look, this is where I'm at and I'm trying to get to here in a better place, that's completely understandable. That's different than somebody's on the phone in my pocket telling me I got to take money out and go to a crypto machine.

[Unidentified Committee Member (Commerce & Economic Development)]: Because I can I can go to the East Rides and say, look, I'm about ready to buy an RV and I'm going to be paying cash? So you're going to see a big transaction. And that's enough for you to say, okay, this is expected.

[Cheryl (Policy Director, Vermont Network Against Domestic and Sexual Violence)]: Think that's absolutely right. And we provide education and implementation support with all new legislation that impacts survivors. That's something we could certainly do here. And in no way are we opposing this section of the bill. What I do think is, and I think part of that is that we see there are potential benefits for a variety of populations, including potentially survivors in this language. These are challenging, really complex situations sometimes. And so when we're balancing the benefits and trade offs of this section, a lot of it weighs out with the exception of A. That is the associated third party language that I've spoken to. Intra meeting when someone is being victimized is a very delicate activity. And so there are situations where, say, a perpetrator or someone who is related to the perpetrator might be notified of the suspicious transaction that is the most dangerous time in a survivor's relationship. It could also be that I, frankly, have an awful relationship with my sibling or my adult child, and they are not the best person to be intervening when I'm being victimized. So just something for the committee to consider, and I would be happy to speak to it more, but I think you all really understand and it's just a policy decision.

[Speaker 0]: Other questions for Cheryl? Abbey?

[Rep. Abbey Duke (Member)]: I have a question. So back to the sort of study and the data collection. I mean, you've testified previously that you think this is not something that is going there's not going be a lot of statements of course debt in the course of a typical year. Yeah. So when we And I'm just curious, if you can reflect a little on data collection, how will we be

[Maria Royle (Office of Legislative Counsel)]: able to track this? How will we know? Absolutely. So

[Cheryl (Policy Director, Vermont Network Against Domestic and Sexual Violence)]: as far as what we can provide, we work with a network of 15 independent nonprofits to provide support to survivors of domestic and sexual violence. They by no means serve all survivors in the state, but they do serve thousands of survivors in the state each year. And so we can gather information from the field through those organizations that can give us an understanding of what they are seeing and how often this law is being utilized. And we are part of this committee and would be happy to share it then. When assessing how frequently this law will be used, you can just look to the states who already have it. And I have shared data in the past that just speaks to how it is a relatively small number of people, but it makes a really big difference in their lives. That's what we expect to see.

[Speaker 0]: Thank you, that helps. Other questions for Charlie? Charlie, thank you. Thank you. Maybe I think are we comfortable with the bill as it's I wanna get things ready so that we get a final draft tomorrow and see if we can move this out.

[Rep. Kirk White (Ranking Member)]: Kirk? Yeah, I think it's great, Bill. Keen in on a study issue, and one of the items in the seven has to do with creditor investigations. And I'm really hoping for a lot around the good faith determination by the creditors. And I think we've heard testimony that we trust a lot of those creditors to do the right thing. But there might be some who have different ideas or standards or whatever. So for me, it's key to know, or at least to study or try to collect information about the nature of that good faith determination. So the only thing that would be, not a big huge deal, but good faith is very important for me, whether it'd be helpful to be expressed in that particular subdivision to say something to the effect of predator investigations, including determinations, could take determinations from the state. Would be my one scripture.

[Speaker 0]: The way it goes.

[Rep. Abbey Duke (Member)]: I'm not sure if this is necessary for updating in the report, but I I am just interested in making sure we're able to track statements of course debt on all kinds of creditors and not just regulated creditors. I think maybe, you know, for what Charlie's testified to, is maybe how we're able to get that data.

[Speaker 0]: I don't think you're going be able to capture everything. But I think, as Charlie said, advocates, not everyone goes to the advocates, but a good amount of people do, which will give us a better idea of what's going on because the networks will provide that information to DFR. You won't capture everything, you're going to capture enough to understand also. My interest would

[Rep. Abbey Duke (Member)]: be really understanding what are unintended consequences and what is potential fraudulent activity. And then I guess if we have a good report, then in '29 or '30, then the bills would be amended.

[Speaker 0]: That's the reason why I gather.

[Rep. Abbey Duke (Member)]: Right, that would be why. So do that and have a date.

[Speaker 0]: One

[Rep. Herb Olson (Member)]: other item. So in terms of the folks that aren't regulated by DFR, I think that's where the constitution, I think where the attorney general comes in, because they have jurisdiction over enforcement of the whole legislative whole statute. So maybe they have an access to understanding complaints that might be filed against a national bank or folks that aren't directly. Right, John? Yes.

[Speaker 0]: The questions? Something out there. What do you people think? I think it's nice to have, I

[Rep. Ian Goodnow (House Judiciary Committee)]: don't know if it's neat to have. And

[Speaker 0]: I like where it's at now. I'm comfortable with it and I know that there's more we could learn, but perhaps we'll be able to refine what may have been missed in some ways if we wanted to learn more. I am curious with me, and this is a process of discovery, people realize, man, that's actually what's happened. You know, this is, and as they interact with service providers, may see there's this kind of an important first round that I'm glad to hear from them. I like it. Think it's They're just leaving it the way it is for now. Yeah. I am. I think it's a good I'm happy with it. It's a good bill. Good bill. Okay. Alright. Edye, anything else you wanna weigh in on?

[Rep. Edye Graning (Vice Chair)]: I just so appreciate everybody's work on this. This is, you know, it's not a bill that was easy. It's not a bill that was quick. We started it last session or last year, and a lot of people have put a lot of time into it to get it to where it is today. And I'm grateful to everybody, especially the committee. We've had some great questions. We've gotten some We made it better. So really thank you everybody.

[Speaker 0]: There were any changes or anything else you need from us, Maria? No. Okay. Well, if you can get us a clean copy for tomorrow at nine, we'll have our final discussions and take a vote on it. Great. Thank you all. Really appreciate the work on this one. So we'll take a break till 02:45. Hey. Our clock's back.

[Unidentified Committee Member (Commerce & Economic Development)]: Yes. I'm fixing it.

[Kirk Siegel (Office of Legislative Counsel)]: Yeah. Gonna solve that. You fix it? So

[Speaker 0]: we'll be back at 02:45 to have more discussions on 02:11.