Lot’s of items are all coming to a head this week regarding the debt settlement industry. The debt settlement trade associations have been called, on short notice, to a hearing to be held by the U.S. Senate on April 22, 2010 where my bet is they will not be met with party favors and a cake.
I bet the Senate and other regulators have had just about enough of bad debt settlement companies and trade groups TASC and USOBA not policing their own industry and the government is going to jump in with both feet.
In my experience both TASC and USOBA have been TOTALLY ineffective at spanking their bad members and kicking them out of their groups. They have not taken any public action I can think of to police the debt settlement industry against specific companies and self-regulate members to make government regulation unnecessary.
Debt settlement companies are not going to like the regulations that are coming as a result of this Senate hearing.
New Debt Settlement Proposed Federal Legislation
These same companies are also not going to like the new legislation that is supposed to be introduced this week in Congress that has been pushed forward by credit counseling trade associations in what appears to be an effort to put the debt settlement guys out of business and to protect their own credit counseling industry.
What appears to be missing in the proposed legislation is a fair and balanced approach that gives consumers new options and solutions to resolving their debt.
More than one confidential source has confirmed (tips@GetOutOfDebt.org) that this legislation that will be put forward in an attempt to make it a federal law to limit up-front fees by debt settlement companies to $50, prohibit monthly fees, and not allow debt settlement companies to charge more than a fraction of what they do now, but this time only after the debt has actually been settled. And there is more juicy stuff in the proposed legislation but we’ll wait to see the public draft to see if it stays in till it’s presented.
The way I see it, the debt settlement industry has one last chance to clean up their act by themselves and clearly demonstrate they can be trusted to police their own trade associations and members. The last thing the FTC or U.S. Senate wants is more happy smoke blown at them from double-speaking debt settlement trade associations. Government lawmakers and regulators need to see action taken or they will take it.
TASC & USOBA, this is the time to start pitching bad members under the bus if you want to save your industry and your credibility.