|Received:||11/14/2008 5:39:09 PM|
|Agency:||Federal Trade Commission|
|Rule:||Debt Settlement Industry - Public Workshop|
Comments:As the founder of a non-profit credit counseling group and after having served on the board of directors of a Consumer Credit Counseling Service office I have observed the debt settlement and credit counseling industry from the inside. Wrongly, many in the non-profit credit counseling world make every effort to keep out for-profit groups that want to provide help and assistance to consumers. I am afraid that the primary reason for this is so that the non-profit groups can protect market share and not to improve the service and assistance given to debtors in trouble. There is not one thing that a non-profit credit counseling group offers that could not be better offered by a for-profit group. For-profit groups should be regulated by a federal statute to provide one set of licensing and regulatory instructions to operate under. Trying to operate under a patchwork quilt of various state laws only increases the hardship on any group wanting to help consumers and does not provide a single additional tool to allow any third-party to have better solutions to offer consumers to deal with their debt situation. The economic cost of compliance with so many various regulations is one of the primary reasons why my group decided to stop providing assistance to consumers and to close our non-profit organization. Not-for-profit credit counseling is severely handcuffed by current funding schemes. They are forced to please the funding sources which are the exact entities that they should be standing up to in representation of their client, the debtor. In other parts of the world, groups that provide help are for-profit and it does not destroy the industry. The minority of help in the UK, for example, is provided by non-profit groups who appear to be even more closely bound to the creditors with former creditor executives even engaged in the management of the credit counseling groups. It is time that people begin to focus efforts on serving the very person that requires the best representation that we can give, and that is the consumer. Consumers deserve options. If a consumer wants to go to a non-profit clinic and receive non-profit limited services, that's fine. But a consumer should not be prevented from seeking professional representation and advanced services from another group, even if it is for-profit. Ever since I first started helping debtors, in 1994, there has not been one single law passed that gave consumers, who want to repay what they can reasonably afford, an opportunity to do so. But there are solutions that we can pass to level the playing field and to give consumers a fair chance at debt solutions other than bankruptcy. But consumers have not been properly represented by non-profit groups. Non-profit groups have almost no record of standing up for and defending consumers against banks and creditors. While they may make statements about budgets and finances, you will find little to no outspoken comments about the inequities of the non-profit debt management solutions because the non-profits don't want to risk their funding and thus do not fairly or properly represent the consumers best interest. A for-profit debt counseling or debt settlement industry in the U.S. would give consumers the opportunity to have groups want to move forward with new solutions, to lobby against creditor abuse, to fight for the consumers that are not well or properly served now, and to allow profit to attract the best and most talented staff. There is legal aid and their are lawyers that charge for services. There is medicaid and their are doctors that charge for services. It's about choice. Please give consumers a chance and allow for-profit groups to exist, be creative, to fight for new solutions, to raise excellence through competition. This can be safely done with one federal set of licensing, bonding and regulatory guidelines and your action will for once, give good people with bad debt a real fighting chance at a better life.