The bill establishes a new subchapter titled "Coerced Debt" under 9 V.S.A. chapter 63, which defines "coerced debt" as any debt incurred without the debtor's knowledge or consent, primarily through intimidation or manipulation, particularly in cases of domestic abuse, human trafficking, or exploitation of vulnerable adults. It outlines the documentation required to substantiate claims of coerced debt, such as law enforcement reports and court orders. The bill prohibits individuals from causing another to incur coerced debt and states that such debts are not enforceable against the debtor. Creditors must cease collection activities upon receiving a debtor's statement of coerced debt and are required to conduct reasonable investigations into the claims.

Additionally, the bill enhances protections against financial exploitation by allowing financial institutions to intervene in transactions they suspect may harm customers. It defines "financial exploitation" and grants covered entities the authority to delay transactions and notify third parties if they believe a customer is a victim. The bill also mandates the Commissioner of Financial Regulation to collect data on suspicious transaction holds and study the use of coerced debt protections, with findings due by November 15, 2029. Various provisions of the bill will take effect at different times, with some related to coerced debt set to begin in 2028.

Statutes affected:
As Introduced: 9-2480d, 9-2480k
As Passed By the House -- Official: 9-2480d, 9-2480k
As Passed By the House -- Unofficial: 9-2480d, 9-2480k
As Passed by Both House and Senate -- Official: 9-2480d, 9-2480k
As Passed by Both House and Senate -- Unofficial: 9-2480d, 9-2480k
As Enacted: 9-2480d, 9-2480k