New Maryland Law Protects Against Abusive Lenders and Debt Collectors
A new Maryland law offers additional state regulation of lending and debt collection in order to protect consumers from predatory lending practices. Most of the changes went into effect October 1, 2018, while some do not kick in until January 1, 2019. Read on for details about the new law, the Financial Consumer Protection Act of 2018, and contact a practiced, effective bankruptcy and mortgage abuse attorney with any questions or for help with debt relief.
Maryland’s Financial Consumer Protection Act of 2018
The Financial Consumer Protection Act of 2018 (FCPA) expands upon the Maryland Consumer Protection Act (MCPA). The MCPA punishes false or misleading statements by businesses targeted at consumers and provides a cause of action for consumers to sue based on a business’s misleading statements and advertisements. The FCPA expands the MCPA to include “abusive practices,” allowing consumers to sue when a business, such as a mortgage lender, engages in such abusive conduct. The MCPA raises the maximum civil penalties for such practices to $10,000 for a single violation of the act, and $25,000 for repeat violations.
Relating to collection activity, the FCPA expands the definition of “licensed collection agency” subject to the Act to include persons who are required to be licensed, even if they are not actually licensed, preventing unlicensed debt collectors from getting away with inappropriate conduct. The FCPA also requires collection agencies to obtain the appropriate collection licensing in order to continue to collect, and subjects the collectors to additional state penalties for any violation of provisions of the federal Fair Debt Collection Practices Act (FDCPA). Relevant provisions in the FDCPA govern when and how debt collectors communicate with consumers, appropriate collection practices (including a prohibition on unfair, misleading, or abusive conduct), as well as the timing and content of required written notices before certain collection actions may be taken.
The FCPA also requires the state to establish a student loan ombudsman to receive and review complaints from student loan borrowers and generally monitor student loan policies and activities throughout the state.
The majority of these provisions went into effect on October 1, 2018. Certain additional provisions relating to consumer and secondary mortgage loans will become effective on January 1, 2019. The January provisions include raising the threshold for loans subject to the Maryland Consumer Loan Law (MCLL) from $6,000 to $25,000, covering loans for personal or familial purposes.
If you’re struggling with debt in Maryland and want help getting back on the right financial footing, contact a skilled and compassionate Germantown bankruptcy lawyer at Haeger Law for a no-cost consultation at 888-463-3520.