Credit counseling groups feel the past couple years of cowboy debt settlement have had a significant impact on their operations. The impression I am hearing is that consumers that may have otherwise been able to be helped via a credit counseling program were attracted to unsubstantiated promises of rouge debt settlement companies and then wound up in deeper trouble, often then followed by a needed bankruptcy to get them out of the ditch.
The credit counseling industry is facing some uncertain times in the next couple of years. Between the recent case which presents the possibility of claims of violations of the Fair Credit Reporting Act by some credit counseling groups, reduced DMP enrollment, and the uncertain sweeping regulation of the Consumer Finance Protection Bureau (“CFPB”), it is not going to be smooth sailing for credit counseling groups as other think.
The prevailing attitude among other debt relief providers is that credit counseling has enjoyed an easy ride in the debt relief world. On one hand I would agree. Credit counseling has enjoyed a tremendous amount of free publicity and has become ingrained in our collective national psyche as the white hat solution without much scrutiny.
On the other hand credit counseling has been under significant attack and is in fact backed way into a corner, drawn in by the very people that fund them, the creditors. With credit counseling funding significantly cut and the inability for credit counseling groups to get new plans pushed forward like the 60/60 reduced payment plan through the Office of the Comptroller of the Currency, the outlook for new significant funding opportunities looks a bit daunting if you ask me.
While credit counseling has been shackled by the whim of creditors which control their funding, debt settlement has been beaten down by the bad acts of rouge and greedy debt settlement companies that have only marched themselves into the wrong kind of public attention and needed regulation to bring the debt settlement industry more into line with the needs and goals of the people they serve.
Feel free to comment and add your predictions of what credit counseling will look like moving forward. I’d love to hear what you see in your crystal ball.
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