H.385 is a legislative bill introduced in Vermont that aims to provide remedies and protections for victims of coerced debt, defined as any debt incurred due to domestic abuse, human trafficking, or the exploitation of vulnerable adults, where the perpetrator has used the debtor's personal information without consent or has employed intimidation. The bill establishes a new subchapter under 9 V.S.A. chapter 63, outlining the necessary documentation for substantiating claims of coerced debt, such as law enforcement reports and court orders. It prohibits the incurrence of coerced debt, stipulating that such debts are not enforceable against the debtor, and requires creditors to cease collection activities upon receiving a debtor's statement of coerced debt.

The bill also introduces new definitions and protective measures against financial exploitation by covered entities, such as financial institutions. It allows these entities to take protective actions if they suspect a customer is a victim of financial exploitation, with protections from liability if actions are taken in good faith. Additionally, the bill mandates the Commissioner of Financial Regulation to collect data on suspicious transaction holds and conduct a study on coerced debt protections, with findings due by November 15, 2029. The provisions related to suspicious banking transactions will take effect upon passage, while those concerning coerced debt will take effect on July 1, 2028, applying to all outstanding coerced debt.

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