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Senate Commerce Committee Statement to Senate, No. 1310 (State of New Jersey, June 10, 2024)

Summary

Senate Commerce Committee statement to Senate, No. 1310, with committee amendments, State of New Jersey, dated June 10, 2024. The committee reports favorably and with committee amendments Senate Bill No. 1310, which as amended allows certain for-profit debt adjustment companies to conduct business in the State. The statement says current law lets only nonprofit social service agencies and nonprofit consumer credit counseling agencies operate debt adjustment services, and the bill creates an exception for a for-profit company that does not receive or hold consumer funds and is regulated by the Federal Trade Commission under its “Telemarketing Sales Rule.” It says the committee amended the bill to require for-profit licensees to disclose certain information to a debtor.

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“Senate Commerce Committee Statement to Senate, No. 1310 (State of New Jersey, June 10, 2024).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-06-10-scm-s1310-s1-79bdec7424/, SHA-256 6becf90238d54fcd9a282b0522ae33f1e1b0bb86d0b0acbf2178884087e3524c.

Full text

     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

                  SENATE, No. 1310
                   with committee amendments



 STATE OF NEW JERSEY
                      DATED: JUNE 10, 2024

    The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 1310.
    As amended, this bill allows certain for-profit debt adjustment
companies to conduct business in the State. A debt adjuster is 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.”
    The bill would provide that for-profit debt adjusters are not
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.
                                   2

    The bill also requires for-profit debt adjuster licensees that enter
into an agreement with a debtor to disclose certain information to
the debtor.
    Lastly, the bill clarifies language about persons engaged in the
practice of law that are not deemed to be debt adjusters.
    This bill was prefiled for introduction in the 2024-2025 session
pending technical review. As reported, the bill includes the changes
required by technical review, which has been performed.

COMMITTEE AMENDMENTS
   The committee amended the bill to add a requirement that for-
profit debt adjuster licensees that enter into an agreement with a
debtor disclose certain information to the debtor.

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