News

Consumer credit industry criticizes Ohio, Pennsylvania legislation on debt settlement

AICCCABoth Ohio and Pennsylvania have introduced legislation that is intended to ramp up oversight of the for-profit debt settlement industry, but some industry participants maintain that the legislation does not address practices that may be harmful to consumers.

“We have written to the state legislators sponsoring this legislation in both Ohio and Pennsylvania outlining our concerns for consumers,” David Jones, the president of the Association of Independent Consumer Credit Counseling Agencies, said. “Recent actions taken by the Consumer Financial Protection Bureau against abusive and even criminal debt settlement abuses would indicate that many consumers are still suffering because of the practices of some for-profit debt settlement companies, and these proposed bills will not help address the problem without substantial amendment.”

Ohio H.B. 173, a bipartisan measure sponsored by Reps. Louis Terhar (R-Ohio) and Dale Mallory (D-Ohio), seeks to codify consumer protections adopted by the FTC into state law. Pennsylvania S.B. 622, sponsored by Rep. Kim L. Ward (R-Penn.), seeks to require licensure for individuals who provide debt settlement services.

AICCCA recommended amending both states’ legislation to include caps on fees, restrictions on enrolling consumers whose financial conditions make it unlikely that they can successfully complete a debt settlement program, requirements to provide restitution and increased penalties for violations.

Comments are closed.