SCS SB 216 -- DEBT SETTLEMENT PROVIDERS

(Vetoed by the Governor)

This bill changes the laws regarding debt settlement providers.
In its main provisions, the bill:

(1)  Requires a debt settlement provider to only engage in debt
settlement services for compensation under a debt settlement
plan;

(2)  Defines "debt settlement service" as the negotiation,
settlement, or alteration of the terms of payment of a consumer's
unsecured debt with the consumer's creditor without receiving or
holding money from a consumer for the purpose of distributing
that money to the creditor;

(3)  Prohibits the provider from charging more than 4% of the
principal amount of the debt for an enrollment or set-up fee and
more than 20% of the principal amount of the debt in aggregate
fees.  The balance must be collected in equal payments over a
period determined by the provider as long as the last payment is
due no sooner than the median month in the plan.  Upon completion
of the plan, the aggregate fees cannot exceed the amount the plan
reduces the principal amount of the debt originally enrolled in
the plan.  The debtor may voluntarily prepay fees, and the
provider may collect fees on a pro-rata basis once the provider
obtains reasonable offers of settlement from any creditors;

(4)  Requires a provider to carry aggregate liability insurance
in the amount of at least $1 million;

(5)  Authorizes the Attorney General to enforce the provisions of
the bill; and

(6)  Authorizes a circuit court to enjoin any person from acting
or offering to act as a debt settlement provider and to order a
provider to correct any violation, including making restitution
of money or property to a person aggrieved by a violation.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:26 am