Debt Management Service Providers

NACCA 2010

Topics
Maine Law Difference between services offered Mortgage related issues Exam Process Exam Tips Complaints and Investigations Attorneys

Maine Law
Non-Profit 1999 Amended 2007

Limited

Fees Required Debt Managers to be certified. Amended in 2009 to include residential mortgage provisions

Definition of DMSP Under the Statute

Maine law defines a debt management service provider to encompass just about all entities which offer:
To

assist or arrange for the distribution of payments (credit counseling services) Has any control directly or indirectly over consumer funds (electronic funds transfers) Take direct collection of payments for further remittance to creditor Acting or offering to act as an intermediary for the purposes of settling, adjusting, discharging, reaching a compromise
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Differences Between The Services Offered

Debt Management Debt Settlement Credit Counseling Credit Repair

Mortgage Issues

Recent changes to Maine law

Certified

counselors training must include: 1) subject matter related to tax consequences of forgiven debt, 2) all options available to the consumer. Cancellation still must be in writing; however, it is only effective up until the date of the consummation of the transfer DMSP must provide in writing whether the consumer will be liable for any deficiency.
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Exam Process

Send pre exam letter and questionnaire six weeks before material is due to be mailed to the office
List

of documents List of Maine clients receiving services List of current creditors

Exam Tips
Review cases and complaints Internet search Be aware of unlicensed activity when reviewing other licensee types that you examine. (money transmitters) Review list of creditors for other unlicensed activity (payday lenders)

Examination Statistics

2009
Twenty

five routine compliance exams conducted of the 32 registered providers. Resulted in 8 companies required to refund consumers $30,726.65

Complaints and Investigations

During 2009 the bureau fielded 132 complaints, 15 against licensed companies and 117 were against companies who are unlicensed. As of April 25th the bureau has already responded to 115 complaints of which 109 were against unlicensed companies. The bureau has recovered a total of $55,626.73 during the period of January 1, 2009 to April 25, 2010.
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Attorneys and Law Firms

Attorneys who do not exclusively offer debt management services are exempt from Maine law
Problems

this creates?

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Additional Information

Substantive material provided on NACCA Website

Overview

of Maine law Detailed description of the examination process. Sample pre-exam letter, questionnaire and examiner checklist Summary of actions taken against debt management service providers.
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Questions?

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