New Bill Promises to Bring Big Changes to Credit Counseling Industry

On August 17, 2006, President Bush signed into law H.R.4, referred to as the Pension Protection Act of 2006. In addition to pension law reforms, H.R.4 includes new standards for Consumer Credit Counseling Organizations that will have a sweeping effect on the industry.

“Advantage Credit Counseling Service, Inc. (ACCS) welcomes the reforms proposed by H.R.4,” says Stephen Piotrowski, President and CEO.” As a legitimate non-profit agency committed to offering educational information to the public regarding budgeting, personal financial and debt management and the wise use of credit; we would like to see the predatory and deceptive agencies chased out of the industry.”

In accordance with the new laws, for a consumer credit counseling agency to retain its 501(c)(3), non-profit status the organization: cannot gain more than 50% of its revenue from creditors or debt management program fees; must tailor credit counseling to specific needs of individuals; is required to provide services even if an individual is unable to pay; does not make any loans to debtors nor negotiate the making of loans on their behalf; and cannot own more than 35% of an entity which lends money, repairs credit scores or processes payments.

These new standards are, in part, due to findings of IRS audits of 63 “non-profit” consumer credit counseling agencies, which represent more than 40% of the revenue in the industry. Over the past two years, the IRS has investigated these “non-profits,” and as of May 2006 had completed 41 audits—all of which resulted in the revocation, proposed revocation, or other termination of tax-exempt status.

“Advantage Credit Counseling Service, Inc. has always held to the highest standards of the industry, and stands with the National Foundation for Credit Counseling (NFCC) in commending the President and Congress for protecting the American consumer from agencies who seek only to gain profit, while falsely promising sound financial and debt management educational services,” declares Piotrowski.
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About Advantage Credit Counseling Service

Since 1968, Advantage Credit Counseling Service, Inc. (ACCS) has been educating and counseling consumers about budgeting, personal financial management and the responsible use of credit. ACCS’s services help to financially empower individuals, bettering their lives; increasing family stability; improving workplace performance; and ultimately benefiting the entire community. ACCS has nine locations in Western and Central Pennsylvania, and offers financial education workshops, credit counseling, housing counseling, and bankruptcy counseling in numerous other states. For more information on additional services, class schedules, and States S serviced please visit www.advantageccs.org or call 1-866-699-2227.

Advantage Credit Counseling Service, Inc. is an accredited member of the NFCC and AICCCA; and member in good standing of the Better Business Bureau.

Shannon Murphy
412.390.1316