Date: 01/19/2006
Final
BILL SUMMARY for HB06-1066
HOUSE COMMITTEE ON JUDICIARY
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02:42 PM -- House Bill 06-1066
Representative Boyd, prime sponsor, summarized the provisions of HB 06-1066. The bill extends existing protections for consumers under the Colorado Fair Debt Collection Practices Act to private child support collectors. She explained that the process and structure for collecting child support differs for private collectors. Among other things, the bill sets forth 12 prohibited practices that have been grounds for complaints in other states. The bill is intended to preempt the occurrence of these practices in Colorado. The sponsor distributed Amendment L.002 (Attachment H).
The following people testified on the bill:
02:50 PM -- Mr. Darryll Grubbs, representing the Child Support Enforcement Council, distributed his written testimony (Attachment I) and spoke against the bill. He described the services that private child support collection agencies provide to custodial parents. He expressed support for the sponsor's efforts to discourage fraudulent and deceptive practices for private agencies, and agreed that disclosure regarding contract information is important. However, he asked that any new regulatory guidelines be crafted so they do not cripple the agencies economically or put undue burden on them, stating that some provisions in the bill could become onerous to the agencies, such as the requirement for a cap on contingency fees. He responded to questions from the committee.
03:04 PM -- Mr. Eric Rosenkoetter, representing SupportKids, spoke against the bill. He described how SupportKids (a large, national private child support collection agency) collects child support from obligators for its clients. He affirmed the need for clear contracts and fee amounts, making payments through a state disbursement agency, and disallowing private agencies to charge fees based on collection amounts attributable to state agencies. He spoke in opposition to several provisions in the bill, including the cap on contingency fees, some conflicting provisions concerning the contingency fee, and some of the termination provisions. He also responded to questions from the committee.
03:30 PM -- Ms. Pam Hennessey, representing the Colorado Center for Law and Policy, spoke in favor of the bill. She agreed that private agencies serve a valuable role in collecting child support, but expressed concern about the agencies' ability to adequately strike a balance between their business goals and their mission. Among other concerns, she believes it is unfair for the private agencies to collect a contingency fee based on an amount that could be collected from other agencies, including state agencies. She explained that when a check is sent, it does not break out the total amount into subtotals for current support, support arrears, or child support debt. She responded to issues raised by previous witnesses and answered questions from the committee.
03:54 PM -- Ms. Laura Udis, representing the Consumer Credit Unit of the Attorney General's (AG) office, spoke in favor of the bill and the protections it will provide. The unit enforces the Fair Debt Collection Practices Act, and licenses child support collection agencies. In response to earlier discussion, she indicated that attorneys are subject to the state's Fair Debt Collection Practices Act, but do not need to be licensed with the AG's office to collect child support debt because they are registered with the Colorado Supreme Court. She added that while the federal Fair Debt Collection Practices Act does not cover collection of child support, private child support collection agencies are covered under Colorado law, although the Colorado act mostly protects debtors, not creditors (in this case, the custodial parent). She clarified what is and is not covered under current state law for collection agencies.
Representative McGihon distributed an article regarding private child support collection agencies (Attachment J).
04:11 PM -- Ms. Pat Ratliff, representing Colorado Counties, spoke in favor of the bill.
04:13 PM
The chairman closed the public testimony portion of the hearing and indicated that no action would be taken at this time on amendments or the bill. The bill was laid over to a future date.