FILE - credit cards, debt

(The Center Square) – A North Carolina Senate committee will hear details Wednesday on a bill aimed at offering consumer protection to North Carolinians facing financial hardship because of COVID-19.

House Bill 1067 broadens the scope of North Carolina’s debt settlement prohibition law and makes it easier for the attorney general to prosecute violators.

The bill unanimously cleared the House on Tuesday and will be reviewed by the Senate Finance Committee on Wednesday afternoon.

Reps. Julia Howard, R-Davie; Jason Saine, R-Lincoln; and Michael Wray, D-Northampton, sponsored the bill.

“The North Carolina House continues to identify critical reforms to support families across our state facing tremendous financial challenges amid an economic shutdown,” the representatives said in a joint statement Tuesday.

Under current law, collecting or negotiating debt payments to split among creditors for a fee is a misdemeanor. The attorney general also can seek civil relief to stop debt adjusting and debt settlement.

HB 1067 would close loopholes in the law that have allowed companies to continue the illegal practices by using affiliates. It also would move debt adjusting and debt settlement from the criminal chapter into the civil chapter of the state’s consumer protection laws, increasing the attorney general’s ability to implement the ban.

The measure also would make it easier for debtors to sue the companies, legislative analyst Greg Roney said.

“Because a lot of times when people get involved in these schemes, that ultimately leads to them going bankrupt,” Roney told members of House Finance Committee on May 12.

House Speaker Tim Moore, R-Cleveland, applauded the bipartisan effort Tuesday.

“The North Carolina House is committed to doing everything we can for folks impacted by unprecedented financial peril, and stopping abusive collections practices is an important part of helping families and businesses through this pandemic,” Moore said.

If HB 1067 passes the Senate Finance Committee, it would have to be approved by the Committee on Rules and Operations of the Senate before it reaches the Senate floor.

The bill was sent to the rules committee Tuesday but was forwarded to the finance committee Wednesday morning.

Staff Reporter

Nyamekye Daniel has been a journalist for three years. She was the managing editor for the South Florida Media Network and a staff writer for The Miami Times. Daniel's work has also appeared in the Sun-Sentinel, Miami Herald and The New York Times.