Summary of New Jersey Senate Bill No. 2989
New Jersey Senate Bill No. 2989 (“NJ S.B. 2989”) entitled: “Makes certain for-profit debt adjusters eligible for licensing to conduct business in State,”1 is a recently proposed legislation that would allow for certain entities to operate within the state. The Bill seeks to amend existing legislation in New Jersey that does not currently allow for-profit entities to obtain a debt adjustment license.2
In its current form, the proposed Bill would allow certain for-profit debt adjustment companies to conduct business in the State.3 Under New Jersey’s current “debt adjusters law,” only non-profit social service agencies and non-profit consumer credit counseling agencies may operate debt adjustment services in the State.
The proposed Bill would create an exception to the current law to allow certain for-profit debt adjustment companies to conduct business in the State, subject to certain requirements. These requirements include that the company (1) does not receive or hold consumer funds; and (2) is regulated by the Federal Trade Commission (FTC).
Who proposed New Jersey Senate Bill No. 2989?
NJ S.B. 2989 was introduced September 22, 2022, and is sponsored by State Senator Nellie Pou (D) of District 35.4
Would New Jersey Senate Bill No. 2989 affect debt service companies?
The proposed legislation will subject for-profit debt adjuster companies to the same licensing requirements and regulations as non-profit entities that provide debt adjustment services in New Jersey.5 However, these debt adjustment service providers can only operate under certain conditions. If the proposed Bill goes into effect, a for-profit debt adjuster would not be required to provide a certification about salaries and expenses as part of its annual audit. Also, the commissioner would be authorized to establish maximum fees that may be charged by for-profit debt adjusters. The Bill further provides that the provisions of the debt adjuster act are only applicable to for-profit debt adjusters to the extent that they do not conflict with the federal Telemarketing Sales Rule.6
In addition, the Bill would provide that for-profit debt adjusters would not be subject to the bonding requirements that apply to non-profit social service agencies and non-profit consumer credit counseling agencies that perform debt adjuster services in New Jersey.
Current Status of NJ S.B. 2989
As of September 22, 2022, the Bill was referred to the Senate Commerce Committee for review.
If you would like to discuss more about how proposed legislation NJ S.B. 2989 could affect your business, please contact Shipkevich PLLC through our website.
1 2022 Bill Text NJ S.B. 2989.
2 N.J.S.A. § 17:16G-1 (LexisNexis, Lexis Advance through New Jersey 220th First Annual Session, L. 2022, c. 101 and J.R. 3).
3 2022 Bill Text NJ S.B. 2989.
4 See id.
5 Id.
6 See 16 C.F.R. § 310.4.