The FCC unanimously adopted rule changes on the collection of cla...

changes in the Debt Collection Improvement Act (DCIA) of 1996 and rules adopted by the Departments. of Justice and Treasury, “adjusted to take into account the special circumstances of debts arising under our auction rules.” The order included a rule under which the FCC will withhold action on applications and other requests if the applicant is delinquent in non-tax debts owed to the Commission. This rule calls for dismissal of such applications if the debt in question isn’t resolved. Key changes to the FCC’s debt collection rules include increasing the value of claims the FCC can compromise, suspend or terminate and the minimum value that can be referred to the DoJ. The maximum amount was raised to $100,000 from $20,000. The minimum amount that can be referred to the Justice Dept. rises to $2,500 from $600. The order said the change also reflects new debt collection procedures under the DCIA, including: (1) The transfer of delinquent debt to the Treasury Dept. for collection. (2) Mandatory credit bureau reporting. (3) A prohibition against extending federal assistance in the form of loan or loan guarantees to delinquent debtors. (4) The addition of DCIA administrative wage garnishment requirements and the federal salary offset procedures into FCC rules. The FCC said that under the rules, it won’t approve any applications or other authorizations until it determines that all delinquent debt to the FCC by the entity is paid or arrangements have been made for payments. The FCC’s so-called “red light rule” allows delinquent debtors to resolve their delinquency within 30 days to avoid having an application dismissed. In an earlier notice, the FCC had proposed that the 30-day period wouldn’t apply to applications when more restrictive rules oversee the treatment of debtors who have fallen behind. As an example, the FCC said existing rules require auction applicants to certify they aren’t behind in non-tax debt or their short-form application will be rejected and they won’t be able to bid. The FCC adopted this proposal, as well as one in which the red light rule applies to subsequent applications filed by winning bidders, known as “long-form applications.” But the FCC adopted an exception to comply with U.S. Bankruptcy Code related to the Supreme Court’s NextWave ruling. The Supreme Court held that Sec. 525 of the U.S. Bankruptcy Code precluded cancellation of NextWave’s licenses. This provision of the code provides that a govt. agency may not revoke a license “solely” because a debtor hasn’t paid a debt that’s dischargeable in bankruptcy court. The rules provide that applications to which Sec. 525 applies won’t be dismissed by virtue of the applicant’s delinquent status. The order was adopted March 25 and released Tues.