On August 5, 2020, the US Senate Committee on Veterans’ Affairs ordered the Stopping Harm and Implementing Enhanced Lead-time for Debts for Veterans Act of 2020 (the “Act”), formerly known as the Veteran Debt Fairness Act of 2019, to move forward in the legislative process. The Act seeks to substantively amend Chapter 53, title 38 of the US Code in several ways, including those listed below. If signed into law, the Act would relieve many veterans from the burden of federal debt they incurred through no fault of their own and make the debt dispute process timelier and more transparent. The Act still has several legislative hurdles to overcome before it can become law. Here are some highlights of the proposed legislation:
- The Act would limit the authority of the Department of Veterans Affairs (the “VA”) to recover debts from veterans that arise as a result of a benefit overpayment and the VA’s failure to process information provided by the veteran within applicable timeline standards.
- The Act would require the VA to provide notice to veterans if it determines it made an overpayment, which would include instructions for how the veteran can dispute the overpayment or request a waiver of indebtedness. It would also limit the VA from taking action on the overpayment until 90 days after it issues the notice.
- The Act would require the VA to report to Congress within 180 days of the enactment of the Act, and annually thereafter, on the improvement of notification and communication with veterans that receive overpayments.
- The Act would require the VA to promulgate regulations to establish a minimum amount of a claim or debt, arising from a VA benefit, that will be reported to a consumer reporting agency.
- The Act would require the VA to prescribe a process for veterans to dispute the existence or amount of indebtedness and requires claims to be adjudicated within 120 days after filing. During the pendency of that proceeding, the VA would not be able to submit the debt to a debt collector.
We will continue to monitor and report on the Act as it progresses through the legislative process.