SB 328 Summary

• Defines "bona fide nonprofit organization" as a 501(c)(3) tax-exempt entity providing financial counseling services with certified counselors and membership in nationally recognized credit counseling organizations.

• Requires the Department of Financial Institutions to adopt separate licensing and regulation rules for bona fide nonprofits, considering their operating standards, financial burdens, and consulting with nonprofit stakeholders.

• Eliminates close-out fees that licensees could previously charge debtors and extends timeframes for notifying debtors of creditor rejections (from 5 to 7 business days), notifying creditors of cancellations (to within 30 days), and returning trust funds (to within 15 days).

• Allows bona fide nonprofits to skip written budget analysis requirements if a certified financial counselor verifies debtor income, expenses, and debt information, and permits nonprofits to adjust monthly service fees to comply with their accreditation organization standards.

• Changes agreement cancellation for nonpayment from 60 days to 90 days of missed payments and permits licensees to charge the $50 setup fee before the first creditor payment is made.