A tipster (send in your tips here) recently emailed me saying that the inside scoop is that Bank of America is going to start working with fewer credit counseling agencies, or at least stop accepting DMP proposals.
Bank of America has been some interesting things recently. Most intriguing is their selected 75%-50 month repayment plan they are offering at 0% interest.
The plan works out to be a good deal for consumers, if they can get it. In fact it’s a better solution with Bank of America than either most debt settlement deals or credit counseling plans can offer.
While I have no confirmation on the plans by Bank of America to only focus on working with the ten or so of the largest agencies I think there is enough information floating about to make the whispers a plausible reality.
Insiders in the credit counseling world are saying that Bank of America has made it clear to some their intention is to eliminate working with a significant number of DMP providers and refuse to accept repayment proposals from many otherwise recognized 501(c)3 nonprofit credit counseling groups.
This will certainly impact credit counseling groups that will have to say, sorry Bank of America doesn’t work with us. The ones that Bank of America will accept proposals from will brag about that to consumers as evidence why consumers should work with them.
These whispers have been floating about for a year or so about this move but it just seems there is more emphasis behind this at this time. If it’s going to happen, it might be a move that’s close to being rolled out.
From a Bank of America point of view it seems to make logical sense. By paring down who they work with it would only mean needing to manage ten or so relationships. Besides, there may be some risk protection on their part to make sure the rumored demise of a number of credit counseling groups does not leave Bank of America stranded with proposals but to agency to manage them.
In the past year there have been a couple of examples of credit counseling groups, including nonprofit groups like UFS, that have gone out of business and left a mess for creditors and consumers to try to deal with.
A move by Bank of America to put this plan in place may result in a suit by some agencies against Bank of America but we’ll have to wait and see what really happens.
Bank of America to Credit Counseling Agencies - It's Not Me, It's You by Steve Rhode
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