The Department of Banking in Pennsylvania is facing opposition to the recent legislation in Pennsylvania that requires debt servicing firms to be licensed in order to provide services to Pennsylvania residents. A lawsuit has been filed by The Association of Settlement Companies (TASC) and two of its members operating in Pennsylvania that challenges the new law.
The New Law
Pennsylvania became the most recent state to enact legislation that requires licensing of debt settlement companies. The purpose is to increase oversight of debt settlement providers by limiting access to approved companies.
Companies must first submit an application in order to register as a licensed debt settlement firm that will be doing business with Pennsylvania residents. They must also post a substantial bond before they are able to operate.
Reason for Opposition
These debt settlement providers claim to support regulation, but they oppose the related process for approval. According to Wesley Young, Director of TASC, it could take up to two years simply to promulgate rules and regulations. In other words, it could keep some debt settlement companies left out until they are able to register and gain approval.
Vision Credit does not support debt settlement companies and we deem their activities to be of questionable nature at best. While some clients could benefit from settling on an older debt, they could almost always do better negotiating their own settlements and saving the 15-25% in fees charged by debt settlement companies. If you are interested in settling a debt, you might wish to review the pros and cons of debt settlement.
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