Proposed federal legislation was unveiled today to require mandatory fair-share payments to credit counseling agencies.
Philadelphia, PA (PRWEB) July 30, 2009 -- The American Association of Debt Management Organizations (AADMO) today unveiled its proposed federal legislation to require mandatory fair-share payments to credit counseling agencies.
The purpose of the legislation is to promote and ensure the continued operation and viability of debt management organizations and for other purposes. This federal legislation would require the payment of fair-share in the amount of 15% of funds received by creditors, require the acceptance of debt management plan (DMP) proposals for certified instances of defined serious financial hardship and provide assurances for creditors that credit counseling agencies are lawfully permitted to propose and fulfill DMPs for consumers.
The legislation makes the makes the following findings:
(1) Debt management organizations are an essential part of the consumer credit system offering services necessary to relieve the distress of consumers in financial hardship, provide an orderly repayment of debt and an effective alternative to bankruptcy;
(2) Consumer debt and default levels are now at historically high levels;
(3) Debt management organizations offer proactive loss mitigation and allow creditors to recover a significant amount of consumer debt that would be otherwise uncollectible, charged-off to profit and loss or discharged in bankruptcy;
(4) Debt management organizations are dependent on creditor cooperation and contributions to provide their services; and
(5) Creditors have reduced their financial contributions to, and the support of, debt management organizations to a level that threatens the ability of many of these organizations to provide services to consumers.
AADMO is the largest trade association for the credit counseling and debt management industry. Nationwide, the majority of licensed and legally operating credit counseling agencies are members of AADMO.
AADMO is an industry education and advocacy organization the mission of which is to promote and ensure the continued operation and viability of credit counseling and debt management organizations.
AADMO members are consumer credit counseling agencies, debt management organizations, credit counselors, personal finance educators, credit and debt information educators, bankruptcy pre-filing counselors, bankruptcy pre-discharge educators, consumer lawyers and many others.
AADMO is the only trade association to have held state law compliance workshops with the New York State Banking Department and the California Department of Corporations upon enactment of their respective laws governing credit counseling. AADMO is also the only trade association for the industry to publish a formal summary of state laws that has been reviewed by state regulators.
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