North Carolina lawmakers again decide to shut down debt settlement companies :: WRAL.com

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– State lawmakers will try again this year to fill a loophole in North Carolina law that they say allows debt settlement companies outside the state to use bait and turn tactics. exchange for unsuspecting people.

That same bill easily cleared the North Carolina House last year and was under consideration in Senate committee when companies stepped up their lobbying efforts to block the measure, which they say will put them out. state to harm North Carolina and will take a reasonable course. debt off the table for consumers.

“It’s a very valid option,” said Tomas Gordon, general manager of ClearOne Advantage in Baltimore, in a telephone interview. “You take that option away and you’re going to see more people in financial shambles.”

But House Bill 76 passed through committee Thursday morning without debate. The House finance committee ignored public comments, and several lawmakers spoke out to introduce the motion that moved the bill forward unanimously.

Predatory debt settlement is already illegal under North Carolina law, but the bill would fill a loophole that has allowed out-of-state businesses to operate here with advertisements anyway. “We can settle your debt for less” late at night, the rep said. Julia Howard, R-Davie, President of House Finance.

It would also allow North Carolinians already under contract with these companies to exit, Howard said. The measure has several Republican sponsors but also strong support from the left, with the North Carolina Justice Center pushing for the bill.

“It’s a very dangerous product that hurts people,” said Al Ripley, a lobbyist and lawyer who runs the centre’s consumption, housing and energy project.

Howard also took the measure last year. She complained Thursday that the bill was doing well until the industry “hired about 13 lobbyists.”

Gordon and representatives of other companies fighting the bill this year say the state should pass new regulations instead of ending the practice. Gordon admitted the industry had “bad players” but said they wouldn’t mind the rules.

ClearOne loses money for a year with every customer it brings in because it doesn’t charge a “until something really gets done” fee on the debt, he said. Industry lobbyists tried to make changes to the bill last year, but Howard and other sponsors disagreed. That appears to be the case so far this year as well, Gordon said.

Howard, a prominent member of the Republican majority in the House, said Thursday that there is also a Senate version of the bill this year, giving the proposal a better chance of being passed by both houses and becoming law. .

People struggling with debt should instead find regulated consumer credit counselors who by law cannot charge more than $ 40 per month, Howard said.

The American Fair Credit Council, one of at least two industry groups fighting the bill, released figures only on clients of lawmakers’ districts on House Finance and said more than 5,000 people in those districts are currently receiving help through a debt settlement program. .

“For nearly two decades, this vital practice has helped hundreds of thousands of consumers grapple with what can become an overwhelming financial burden,” AFCC Chief Executive Officer Denise Dunckel said in the statement. “If enacted, thousands of North Carolinians currently benefiting from debt settlement would immediately be forced into bankruptcy. “

Gordon is part of a recently formed separate industry group, the Consumer Debt Relief Initiative.



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