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Senate Commerce Committee Statement to Senate, No. 2989 (December 19, 2022)

Summary

Senate Commerce Committee Statement to Senate, No. 2989, State of New Jersey, dated December 19, 2022, reporting Senate Bill No. 2989 favorably. The bill would allow certain for-profit debt adjustment companies to conduct business in the State, whereas under the current debt adjusters law, administered by the Department of Banking and Insurance, only nonprofit social service agencies and nonprofit consumer credit counseling agencies may operate debt adjustment services. The exception applies to a company that does not receive or hold consumer funds and is regulated by the Federal Trade Commission pursuant to the Telemarketing Sales Rule. The commissioner would be authorized to establish maximum fees that may be charged by for-profit debt adjusters.

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Cite this document

“Senate Commerce Committee Statement to Senate, No. 2989 (December 19, 2022).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2022-12-19-scm-s2989-s1-cabedac9a3/, SHA-256 97954db64c23392a30682150463b615bd1c735710cef306574b5d4dbb5ce8e71.

Full text

     SENATE COMMERCE COMMITTEE

                     STATEMENT TO

                   SENATE, No. 2989

 STATE OF NEW JERSEY
                   DATED: DECEMBER 19, 2022

    The Senate Commerce Committee reports favorably Senate Bill
No. 2989.
    This bill would allow certain for-profit debt adjustment companies
to conduct business in the State. A debt adjuster means a person or
entity who: acts or offers to act for a consideration as an intermediary
between a debtor and his creditors for the purpose of settling,
compounding, or otherwise altering the terms of payment of any debts
of the debtor; or receives money or other property from the debtor, or
on behalf of the debtor, for payment to, or distribution among, the
creditors of the debtor.
    Under New Jersey’s current “debt adjusters law,” which is
administered and enforced by the Department of Banking and
Insurance, only nonprofit social service agencies and nonprofit
consumer credit counseling agencies may operate debt adjustment
services in the State.
    The bill would create an exception to the current law to allow for-
profit debt adjustment companies to conduct business in the State
provided the company (1) does not receive or hold, actually or
constructively, consumer funds; and (2) is regulated by the Federal
Trade Commission pursuant to the commission’s “Telemarketing
Sales Rule.”
    The bill would generally subject for-profit debt adjuster companies
to the same rules and restrictions as non-profit entities licensed to
operate debt adjustment services, but with certain exceptions. Under
the bill, a for-profit debt adjuster would not be required to provide a
certification about salaries and expenses as part of its annual audit. The
commissioner would be authorized to establish maximum fees that
may be charged by for-profit debt adjusters. The bill further provides
that the provisions of the debt adjuster act are only applicable to for-
profit debt adjusters to the extent that they do not conflict with the
federal “Telemarketing Sales Rule” at 16 C.F.R. 310.4.
   The bill would provide that for-profit debt adjusters shall not be
subject to the bonding requirements that apply to nonprofit social
service agencies and nonprofit consumer credit counseling agencies
that perform debt adjuster services in the State.

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