Gov. Davis signs credit counseling consumer protection bill into law
SACRAMENTO, Calif. - Gov. Gray Davis signed into law the weekend of Sept. 21, A.B. 2293 - the Non-Profit Consumer Credit Counseling Regulation Act. The new law takes effect Jan. 1, 2003. Among the provisions of the Non-Profit Consumer Credit Counseling Regulation Act, it: requires non-profit credit counseling agencies to submit documentation to the State Department of Corporations (DOC) before engaging in business in the state, as well as provide ongoing documentation to continue to operate; requires counseling agencies to post a bond; defines debt services practices, specifically debt management plans and debt settlement plans; and sets caps on fees that agencies can charge consumers for these services. The law also establishes best practice standards for operating in California; provides the DOC the ability to enforce the law; and requires the DOC to conduct a study on the fee caps. A report on the results of the study has to be presented to the state legislature by March 1, 2003.