Bill Summary: A07268

• Establishes licensing requirements for debt settlement companies under New York Banking Law, requiring companies to obtain a license from the superintendent before conducting business in the state.

• Prohibits debt settlement companies from charging enrollment fees exceeding $50 and settlement fees exceeding 20% of the debt reduction achieved, with settlement fees only collectible after creditor agreement and payment.

• Requires debt settlement companies to provide debtors with written disclosures including individualized financial analysis, clear warnings about credit damage and collection risks, and cancellation rights with refund provisions within 90 days or upon violation.

• Mandates companies maintain separate trust accounts for debtor funds, provide monthly accounting statements, and obtain surety bonds of $250,000 to protect consumers from improper fee charges and fund mishandling.

• Prohibits specified deceptive practices including advising debtors to stop paying creditors, changing mailing addresses on statements, making loans, and collecting unauthorized fees; violations subject to criminal penalties and superintendent enforcement actions.