SB 664 Summary

• Transfers debt management licensing authority from the Department of Commerce to the Department of Insurance and Financial Services and revises regulatory requirements for debt management service providers.

• Requires debt management licensees to conduct thorough written budget analyses before enrolling debtors and maintain trust accounts with 100% insurance coverage for client funds, with monthly reconciliation requirements.

• Establishes maximum fees: $50 initial fee plus up to 15% of debt to be liquidated, with a $25 cancellation fee, and provides debtors a 3-business-day cancellation right without penalty.

• Adds new provisions allowing the director to prohibit individuals convicted of fraud-related felonies from being licensed or employed in debt management, with suspension authority for imminent threats to customers.

• Requires licensees to obtain at least 51% creditor consent within 90 days and prohibits various unfair practices including charging fees via promissory notes, purchasing debtor obligations, lending money, and making misleading advertisements.