A tipster (send in your tips here) that is apparently closely scrutinizing credit counseling agencies has forwarded to me a recently Freedom of Information Act request that the U.S. Department of Justice responded to.
What I found interesting was the amount of money the DOJ wanted in order to respond to the FOIA request on approved credit counseling groups who have made applications to the DOJ in order to provide bankruptcy related counseling.
It seems this investigator ran into a bit of a financial wall as the DOJ wanted up to $42,000 to fulfill the FOIA request.
The reason I find this interesting is that in conjunction with the recent formal investigation requests that were filed recently against two credit counseling groups, and forwarded to me, this request for information paints a bigger picture.
It may just be time for credit counseling groups to get ahead of the close inspection of their activities and embrace the call for credit counseling industry transparency as lead by Christopher Viale of Cambridge Credit Counseling. Being open and transparent buys a lot of goodwill among regulators. Otherwise the question is going to be asked more and more what credit counseling groups have to hide by not disclosing their verifiable and audited performance statistics?
Viale did the absolute right thing with his charge for transparency.
I sense the genie has been loosed from the lamp and there is not going to be any turning back. What’s to now be embraced, secrecy? Points will be scored by credit counseling agencies who respond to Viale’s call to action and it is the best way I see for nonprofit credit counselors to soften any blow of the investigations that appear to be ongoing.
I’m not sure of all the players involved in this targeting of credit counseling for close investigation but I would suspect that this is only the early days of this effort. The people I am aware that are involved are no lightweights or novices when it comes to these issues.
If anything, the facts that will come out of this close investigation of credit counseling will be probably used for an initiative with the Consumer Financial Protection Bureau to level the playing field among all debt relief providers.