Preemptive Federal Law to Regulate Credit Counseling - Call for Submissions and Legislative Recommendations

The credit counseling industry invites all interested parties and stakeholders to provide legislative recommendations for a single preemptive federal law to regulate the industry. Submissions should address specific areas of law such as licensing requirements, bonding, trust accounts, disclosures, investigations, penalties, data security and monetary controls.

The Federal Legislative Summit welcomes the input and participation of all credit counseling agencies, creditors, consumer groups, legislators, federal regulators, state regulators and all other interested parties.

The Federal Legislative Summit will be held at the offices of Venable LLP on May 9, 2007 on the topic of "Crafting and Implementing a Single Preemptive Federal Law to Regulate Credit Counseling".

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The credit counseling industry has become increasingly regulated with numerous diverse and complex state laws. Many of the state laws are contradictory, duplicative and inconsistent. The credit counseling industry has the need to consider the impact of a single federal law that preempts the myriad state laws to promote consistency and provide strong uniform consumer protections.

Currently, credit counseling agencies are separately supervised and licensed/registered in AL, AZ, CA, CT, DE, ID, IL, IN, IA, KS, KY, ME, ME, MI, MN, MS, MT, NE, NV, NH, NJ, NY, OR, RI, SC, TX, UT, VT, VA and WI. The industry also is separately regulated without licensing/registration in AR, FL, GA, HI, LA, MA, NM, NC, ND, OH, WA and WV.

A Uniform Debt Management Services Act ("Uniform Act") has recently become law in DE, RI and UT. The Uniform Act is currently pending in CO, HI , MO and WI and is expected to be considered in several other states in 2007. Each enactment of the Uniform Act is bringing different and unique rules and regulations, applications, bond conditions and insurance requirements.

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This forum will address the implications of multiple versions of a "uniform" law rather than a single federal law. The Delaware Uniform Act, which took effect on January 17, 2007 has created problems with licensing keeping the state from issuing actual licenses in favor of temporary "conditional" licenses. Similarly, the Uniform Act in Rhode Island takes effect on March 31, 2007 but the state has not yet issued applications for licensing.

"Credit counseling agencies are currently governed by laws in most every state, and in some cases multiple laws in a single state. The Legislative Summit will examine the ways that a single preemptive federal law could promote regulatory consistency and promote compliance by reducing redundancy and resolving contradictory legal requirements", said Mark Guimond, Executive Director of the AADMO.

For more information or to register for the Legislative Summit, please contact AADMO at 281-361-2325. While Venable LLP is hosting the Legislative Summit, it does not advocate any particular legislative strategy.