HB 1319 Summary

• Creates a new chapter regulating debt settlement services providers, requiring registration with the Department of Commerce and Consumer Affairs (DCCA) effective July 1, 2013.

• Requires providers to obtain liability insurance, post a surety bond between $10,000 and $50,000, and submit detailed application information including business addresses, fee schedules, and sample agreements.

• Prohibits providers from collecting fees until they have settled at least one debt and the individual has made at least one payment, with fees calculated either proportionally or as a percentage of savings achieved.

• Mandates clear disclosure to individuals before service agreements, including estimated timeframes, cost estimates, risk of credit damage, and notice that funds placed in settlement accounts are client-owned and withdrawable without penalty.

• Grants DCCA authority to investigate complaints, levy civil penalties up to $1,000 per violation, and suspend or revoke registration for material violations or provider insolvency.