Every Other Democrat in Legislature Opposed Sinema's Bill, Brewer Signed It
PHOENIX – Last year, former state legislator Kyrsten Sinema was the lone Democrat to co-sponsor and support legislation to aid out-of-state debt collectors who use abusive practices against Arizonans – a position at odds with what she says on the campaign trail for Congress.
Sinema's decision to aid debt collectors who prey on middle class families marks a clear policy contrast between her and former Arizona prosecutor Andrei Cherny. Cherny worked with Elizabeth Warren to begin the push for the Consumer Financial Protection Bureau to hold credit card companies accountable for abusive practices.
Sinema, on the other hand, partnered with credit card companies and Republicans to sponsor HB 2412, and was the only Democrat to support the bill, which was designed to lengthen the period of time out-of-state debt collectors can go after Arizona residents with aggressive tactics.
Capitol Media Services said Sinema's bill specified "that banks and collection agencies have six years - not three - to pursue people who default on their credit-card debt." [Source: "Collection Period for 'Plastic' Debt Debated," Howard Fisher, Capitol Media Services, April 7, 2011]
Gov. Jan Brewer signed Sinema's bill into law on April 12, 2011. Just a few months later, the lobbyist who pushed the bill, Mike Williams, hosted a fundraiser for Sinema's campaign.
Every Other Democrat Opposed Sinema's Bill
Every other Democrat stood in strong opposition to Sinema's bill, explaining that the abusive debt collectors the bill aimed to help frequently target middle- and low-income families. Sinema's bill unfairly prolonged the time that credit card companies could sell debts to abusive out-of-state collectors who then target Arizona’s citizens, said state Sen. Paula Aboud.
"The institution ends writing them off and then selling the debt for pennies on the dollar to these out-of-state debt buyers," said Aboud. "Some years later this debt buyer jumps on them for a $2,000 debt that is now $8,000 to $10,000 because of the six-year extended period of time where the interest and fees has accumulated." [Source: Capitol Media Services, April 7, 2011]
On April 6, 2011, the bill cleared the Senate with a 21 to 8 vote; all Republicans voted for it and all Democrats voted against it, except Sinema, who was absent to vote on her own bill because she was at a conference in Colorado. The bill passed the House with a 38 to 19 party line vote.
Abusive debt collectors don’t merely target those who owe a debt – research shows that most money paid to debt collectors actually comes from those who do not owe a debt, but pay simply to get the abusive practices to stop. Former employees of one debt collection agency "estimated that anywhere from half to 80 percent of the millions of dollars that the company collected came from harassed consumers who had never owed the company in the first place." [National Consumer Law Center, The Debt Machine, July 2010, available at http://www.nclc.org/images/pdf/pr-reports/debt-machine.pdf]
According to the National Consumer Law Center, abusive debt collection practices are generally "concentrated in cities and counties with lower median income and homeownership rates; higher incidences of poverty and crime; and higher concentrations of relatively young and minority residents."
Often times, the company that seeks debt payment is not that who was originally owed. Credit card companies sell debts for pennies on the dollar to collection agencies that use especially aggressive tactics.
In Arizona, these debt collectors have been known to aggressively stalk and threaten individuals who fall behind on their payments. One Phoenix woman who fell behind on payments on her car was sent threatening text messages and the debt collector even set up a website to track her down. [Source: "Car Stalk," Harper's Magazine, July 2009]
With Brewer's signature on Sinema's bill, abusive debt collectors now have six years to harass middle class families.
"The collections process can become a living hell for consumers," said The Arizona Republic. [Source: "Debtors get calls, collections efforts for years," Megan Neighbor and Kiah Haslett, The Arizona Republic, Aug. 8, 2010]