HB 1553

Abstract

Debt settlement services providers; penalties. Provides for the licensure and regulation of debt settlement services providers by the State Corporation Commission. The measure defines "debt settlement services" as any action or negotiation initiated or taken by or on behalf of any consumer with any creditor of the consumer for the purpose of obtaining debt forgiveness of a portion of the credit extended by the creditor to the consumer or reduction of payments, charges, or fees payable by the consumer. The measure prohibits licensees from accepting a fee from consumers prior to providing the consumers' requested debt settlement services. The requirements imposed by this measure on licensed providers of debt settlement services are similar to those applicable to agencies providing debt management plans. The measure provides for civil penalties against licensees that violate these requirements, grants consumers a private right of action against licensees, and makes a violation a prohibited practice under the Virginia Consumer Protection Act. The licensing and regulation of debt settlement services providers has a delayed effective date of July 1, 2021. The measure directs the State Corporation Commission to establish a procedure to be in effect by March 1, 2021, for any person to apply prior to July 1, 2021, for a license that will become effective when the licensing requirements of this measure become effective on July 1, 2021.

Debt settlement services providers; penalties.Provides for the licensure and regulation of debt settlement servicesproviders by the State Corporation Commission. The measure defines"debt settlement services" as any action or negotiation initiatedor taken by or on behalf of any consumer with any creditor of theconsumer for the purpose of obtaining debt forgiveness of a portionof the credit extended by the creditor to the consumer or reduction of payments, charges, or fees payable by the consumer. The measureprohibits licensees from accepting a fee from consumers prior toproviding the consumers' requested debt settlement services. Therequirements imposed by this measure on licensed providers of debtsettlement services are similar to those applicable to agencies providingdebt management plans. The measure provides for civil penalties againstlicensees that violate these requirements, grants consumers a privateright of action against licensees, and makes a violation a prohibited practice under the Virginia Consumer Protection Act. The licensingand regulation of debt settlement services providers has a delayed effective date of July 1, 2021. The measure directs the State Corporation Commission to establish a procedure to be in effect by March 1, 2021,for any person to apply prior to July 1, 2021, for a license thatwill become effective when the licensing requirements of this measurebecome effective on July 1, 2021.