New Debt Collection Laws Affect US Consumers For 2026

Several changes in 2026 affect how debts can be collected in the U.S., but most are targeted updates (federal rate and fee adjustments, student-loan collection practices, and specific state laws) rather than a single sweeping new national debt collection law. Consumers still rely mainly on the existing Fair Debt Collection Practices Act (FDCPA) and CFPB regulations, with some proposed federal reforms not yet enacted.​

Key federal changes in 2026

• The U.S. Treasury has set a new interest rate to be used for federal debt collection and discounting for calendar year 2026, which affects how interest is calculated on certain federal debts that go into collection.​

• The CFPB adjusted the maximum amount consumer reporting agencies may charge for certain file disclosures under the Fair Credit Reporting Act to 16 dollars for 2026, a 0.50 dollar increase, effective January 1, 2026; this indirectly affects consumers monitoring credit when dealing with collections.​

Student loan collection developments

• The federal government is restarting and ramping up wage garnishments for defaulted federal student loans in 2026, meaning a portion of paychecks can be taken without going to court, once borrowers have been given required notices.​

• Initial garnishment notices are being sent to borrowers who have been more than a year without payment, and the number of affected borrowers is expected to grow over the year.​

Proposed federal reforms (not yet law)

• The Fair Debt Collection Improvement Act (H.R. 2704, 119th Congress) would amend the FDCPA to flatly prohibit collectors from attempting to collect any consumer debt after the statute of limitations has expired, creating a new section 811A, but it is only introduced legislation at this stage.​

• Separately, the CFPB is reviewing and proposing changes to its “larger participant” rule for the debt collection market, which could change which collection agencies fall under direct CFPB supervision depending on future threshold decisions.​

State-level changes starting in 2026

• Illinois has revised its Collection Agency Act effective January 1, 2026, narrowing who must be licensed and clarifying that first‑party creditors collecting their own debts are no longer expressly within the definition of “collection agency,” while simultaneously narrowing some licensing exemptions (for example for mortgage licensees and general “financing and lending institutions”).​

• Tennessee has adopted new licensing and consumer-protection requirements for people offering debt resolution services to Tennessee consumers starting January 1, 2026, which will regulate companies that negotiate or settle debts on behalf of consumers.​

What this means for consumers

• Core consumer protections against harassment, false statements, and abusive practices under the FDCPA and CFPB’s existing debt collection rules remain in force, so rights to dispute debts, request validation, and limit communications still apply in 2026.​

• The most practical 2026 impacts for many consumers will be: increased use of wage garnishment for federal student loans; slightly higher maximum fees for certain credit report disclosures; and, depending on where a person lives, tighter licensing and oversight of debt collectors or debt resolution providers at the state level.​