I think this bill misses on one key area, the fees that this bill will allow debt settlement companies to charge for enrollment and monthly support are too low for any of them to want to stay in business – probably the bills intention – however if the Industry goes away the consumer will be the one who gets hurt the most, they will be forced to go BK immediately instead of trying to work through a settlement or they will be forced to hire a even higher priced attorney with no guarantee of success.

The Bill should provide for more than a $50 enrollment fee, maybe $150 to $250 is more accurate and $10 to $20 per month support fee is more in line with how much support the consumer needs, I think the 5% on settlement fee is very accurate, with just a few changes the bill could regulate and at the same time allow the legitimate companies to continue to operate as an industry, although consumers can settle themselves at sites like www.selfdirecteddebtsettlement.com and save thousands.

This bill has absolutely nothing to do with protecting the consumer. Anybody who believes that is incredibly foolish. This is about one thing—money!! The banks don’t want any settlements taking place because they are losing money. Maybe they should have thought about that before they started charging 30% APR’s and ridiculous hidden and late fees. They put their customers in this position. This bill is designed to shut down an entire industry—not reform it!

I understand what you are saying about fees and the need to stay in business, but perhaps there should not a definitive dollar amount specified in this bill. I’m assuming the problem stems from too many agencies charging a ridiculous amount to the consumer, which only adds to their debt problems. Maybe the 5% fee is a good idea, but then what would motivate the agency to work hard at negotiating a settlement for people who only have a few thousand dollars in debt versus those who are tens of thousands of dollars in debt? I admit, I don’t know much about debt settlement, but I do know there are plenty of bad agencies out there and they would not still be in business if there were an equal number of decent, legitimate agencies practicing.

Yesterday I was alerted to s.3264 the Debt Settlement Consumer Protection Act as introduced by Senator Schumer of New York.

All industries require regulation and the Debt Settlement industry is no different. There are companies that are misleading consumers doing more harm than good. But there are good, hardworking companies that truly put the consumer first, and do their best to be a viable alternative to bankruptcy. However, the act would make it virtually impossible for reputable Debt Settlement companies to continue to operate. Ifmany of the reputable companies are forced to close it will result in the loss of many jobs – a loss that will increase the number of Americans in an unstable financial situation, as well as taking away a viable solution to debt issues.

USOBA and TASC, the debt settlement associations, weren’t even told this was being developed, let alone asked to lend their assistance in its creation.

I agree with lulabela. The regulations propsed are simply an collusive attempt by the banks to persuade the congress to eliminate an avenue for consumers that have fallen prey to many predatory lending practices. This bill would not help, but hurt the very thing they are trying to help. The consumer. One less option for a consumer that has some ability to pay, now may very well be forced into bankruptcy.

Very shady these banks are.

Like any industry, self regulation cannot be relied upon. Consumer protection is important, and regulation of business actions and clear accurate disclosure are needed. However, regulation of fees is intrusive government. Free enterprise allows the market to set a price for a service. Consumers will choose based on the value of the service to them. To demonize an industry based on a few would be like us citizen’s characterizing all Senators as corrupt or unfaithful spouses based on the actions of a few.

i was helped by a debt settlement company and could not have accomplished the job they did in negoiating my debt. my only option was bankrupcy and that did not occur. maybe i was lucky to get a legitimate company, however, the industry should be able to operate within guidelines where they can make a legitimate profit for their efforts. i only say that because of the amount of work they did for my family.
this appears to be big govt. trying to regulate yet another industry

I agree, I feel the industry does in fact need regulation. However the fee restrictions in this bill will make it impossible to stay in business. I also agree with a comment above that maybe the whole intention of this bill is to shut down the industry rather than regulate it. I find it shocking that something like this will pass, I thought our Govt officials are suppose to be for the people. This only takes away a viable option for those who need the help and want to try and avoid BK. I am in the business. The customer service needed to work with these clients alone is a huge dollar amount. If any company tries to work within the guidelines of this bill will not be able to afford to offer the proper service and the result will be worse for the consumer. There are a lot of good ethical companies in the business.

This looks like a political witch hunt to me. Shumer is looking to just eradicate the industry for political gain. Shameful in my honest opinion, but what do you really expect for Shumer? Business as usual.

Regulation would be just fine but to setup a bill that outright Kills an industry that helps the consumer, wouldnt it be nice to see the govt force the hand of big banks to make programs as making home affordable work. This is nothing but a sad day for the people. I think shumer should focus on the real problem the banks.

Where is this “bill” now? Some people are under the impression that it has been passed (i.e. signed into law). As far as I can tell, it has only just come out of Committe, after sitting dormant for nearly two years.

The only winners are the credit counselors who are a paid collection arm of the credit card companies and their sponsoring banks. The losers are consumers who will increasingly need to file for bankruptcy since debt settlement would no longer be available.

According to data with the Better Business Bureau (www.bbb.org) consumers prefer debt settlement when compared to credit counseling. We looked at every debt settlement and credit counseling company in San Diego, Los Angeles, Miami, Jacksonville and New York. Across these five markets there were a total of 408 credit counselors with 2,373 complaints for an average of six complaints per credit counseling company. We found 472 debt settlement companies with 1,843 complaints for an average of four complaints per debt settlement company.

This means not only is debt settlement about half the cost and half the time frame when compared to credit counseling but consumers are getting better service from debt settlement companies too.

This is a very heavy handed amendment (secretly written until the last minute) that will kill every debt settlement company as we know it today. Over 30,000 jobs will be lost from it by shutting the debt settlement industry down at a time when jobs are tough to come by.

In addition to that there will be thousands more consumers who will now have to file for bankruptcy because credit counseling does not provide the same level of financial relief that debt settlement does.

This article just came out today http://www.reuters.com/article/idUSN1418760920100514

Bankruptcies are on the rise right now and this amendment is going to make it a lot worse for everyone.

Last Night I received a call from my debt settlement company to answer a quick survey. The rep told me about this bill that schumer is trying to pass. I just finished looking it up. What’s going on Schumer!! Are you even aware how Debt Settlement Company Actually REALLY DO HELP PEOPLE!! if it wasnt for my debt settlement company, My daughter and my sister in law and I would be in Bankruptcy right now! They not only saved my money but saved my life from stress. Schumer seems to be very aware and educated about the debt settlement process, but is he aware of the collection practices that are occuring as we speak. Is he aware of the possibilities of an account to be put upto date after falling past due over 90 days. Does he not know that theirs a 95% chance that your account will go to collections or you will file bankruptcy if you fall past due on your credit card for over 150 days. I dont get it! Schumer needs to step back and really paint the picture. Yeah hes got a good record, but !

If the new debt settlement ruling should reduce the number of debt relief options for consumers, collection agencies will turn up the volume. These groups buy debt at deep discounts an persue debtors with junk yard dog tactics. I’m pleased that a band of lawyers have formed a hotline to help debtors who have been harassed by collection agencies they can file a complaint and be paid for their trouble. What’s more, the names of debtors who file a complaint will typically be scrubbed from future collection campaigns. For info on this dial the Collection Complaint Hotline (800)379-0688.