HB4507 Summary: Credit Repair Organizations Act

• Renames the Credit Services Organizations Act to the Credit Repair Organizations Act and transfers regulatory oversight from the Secretary of State to the Department of Financial and Professional Regulation.

• Requires credit repair organizations to maintain a $100,000 surety bond and prohibits charging consumers before achieving permanent changes to credit reports demonstrated by three credit reports pulled at specified intervals (initial, after change, and 6 months later).

• Mandates annual reporting to the Department including number of buyers under contract, items disputed, items removed, items reinserted within 6 months, and items remaining removed for 6+ months.

• Establishes strict regulations including $3,000 annual registration fee, prohibition on misrepresentation of results, requirements for written contracts with detailed cancellation policies allowing 15-day processing, and contemporaneous provision of all communications to credit reporting agencies.

• Creates enforcement provisions with penalties up to $1,000,000 for knowing violations, authorizes the Department to examine organizations and order relief including restitution and public notification, and makes violations of the Act unlawful practices under the Consumer Fraud and Deceptive Business Practices Act; effective January 1, 2025.