Summary of HB 128
H.B. 128, Debt Settlement Services – Student Education Loan Debt Relief – Disclosures and Prohibitions, is a recently proposed amendment to certain section of the Financial Institutions Sections of the Annotated Code of Maryland. H.B. 128 seeks to impose additional disclosure requirements and restrictions upon debt settlement companies offering student loan debt relief services to Maryland consumers.
In its current form, H.B. 128 would require companies advertising or providing student loan debt relief services to Maryland consumers to make certain disclosures on their advertisements. Some disclosures include, among others, that the debt settlement company is not affiliated with any government agency, is not a lender, guarantor or servicer of federal student loans, that consumers may seek consolidation and other prepayment plans free of charge through the U.S. Department of Education, and the adverse impacts of failing to make timely payments to creditors.1
Who proposed HB 128?
H.B. 128 was introduced January 12, 2022 by Delegate Lesley Lopez (D).
Restrictions on Debt Settlement Companies offering Student Loan Debt Relief Services
If adopted in its current form, H.B. 128 would impose two restrictions on the activities of debt settlement companies that offer student loan debt relief to Maryland consumers: (1) such companies may not advise a consumer to stop communicating with their student loan servicer; and (2) such companies cannot obtain a consumer’s student aid information in violation of federal law. 2
Current Status of HB 128
As of April 7, 2022, H.B. 128 has passed the House and has been referred to the Governor. If signed into law, H.B. 128 would take effect October 1, 2022.
If you would like to discuss more about how proposed legislation H.B. 128 could affect your business, please contact Shipkevich PLLC through our website.
1 12-1013(B); 2-1013(A).