ASSEMBLY REGULATED PROFESSIONS COMMITTEE

STATEMENT TO

[Second Reprint]

SENATE, No. 1310

STATE OF NEW JERSEY

DATED:  APRIL 10, 2025

      The Assembly Regulated Professions Committee reports favorably Senate Bill No. 1310 (2R).

      This bill allows certain for-profit debt adjustment companies to conduct business in the State.  A debt adjuster is a person or entity who: acts or offers to act for a consideration as an intermediary between a debtor and his creditors for the purpose of settling, compounding, or otherwise altering the terms of payment of any debts of the debtor; or receives money or other property from the debtor, or on behalf of the debtor, for payment to, or distribution among, the creditors of the debtor.

      Under New Jersey’s current “debt adjusters law,” which is administered and enforced by the Department of Banking and Insurance, only nonprofit social service agencies and nonprofit consumer credit counseling agencies may operate debt adjustment services in the State.

      The bill would create an exception to the current law to allow for-profit debt adjustment companies to conduct business in the State provided the company (1) does not receive or hold, actually or constructively, consumer funds; and (2) is regulated by the Federal Trade Commission pursuant to the commission’s “Telemarketing Sales Rule.” 

      The bill would generally subject for-profit debt adjuster companies to the same rules and restrictions as non-profit entities licensed to operate debt adjustment services, but with certain exceptions.  Under the bill, a for-profit debt adjuster would not be required to provide a certification about salaries and expenses as part of its annual audit.  The commissioner would be authorized to establish maximum fees that may be charged by for-profit debt adjusters.  The bill further provides that the provisions of the debt adjuster act are only applicable to for-profit debt adjusters to the extent that they do not conflict with the federal “Telemarketing Sales Rule.”

      The bill would provide that for-profit debt adjusters are not subject to the bonding requirements that apply to nonprofit social service agencies and nonprofit consumer credit counseling agencies that perform debt adjuster services in the State.

      The bill would also provide that the annual report that the commissioner may require a licensed nonprofit social service agency, nonprofit consumer credit counseling agency, or for-profit debt adjuster to file is to include the total number of active consumers in the State, the total number of enrolled consumers in the State, the total fees collected in the State, and the total amount of debt settled in the State.  It also provides that if a licensee fails to file an annual report, the licensee will be subject to penalties available under current law.

      The bill also requires for-profit debt adjuster licensees that enter into an agreement with a debtor to disclose certain information to the debtor.

     Lastly, the bill clarifies language about persons engaged in the practice of law that are not deemed to be debt adjusters.

      As reported by the committee, Senate Bill No. 1310 (2R) is identical to Assembly Bill No. 4598, which was also reported by the committee on this date.