FOR IMMEDIATE RELEASE
August 23, 2006
MAYOR BLOOMBERG SIGNS LEGISLATION REQUIRING FULL DISCLOSURE BY NON-APPROVED CREDIT COUNSELORS
Remarks by Mayor Michael R. Bloomberg at a Public Hearing on Local Laws
“The next bill before me is Introductory Number 290-A, sponsored by Council Members Gennaro, Brewer, Fidler, Foster, Gentile, Koppell, Liu, Mark-Viverito, Nelson, and Weprin. This bill requires businesses that provide a specified combination of credit counseling services to notify consumers if they are not approved pursuant to the Bankruptcy Prevention and Consumer Protection Act of 2005.
“The federal Bankruptcy Prevention and Consumer Act of 2005 was enacted to address, among other things, poor debt management that has led to escalating bankruptcy filings by individuals. Among the provisions of the act is a new requirement that applicants for bankruptcy protection must obtain credit counseling that comprehensively covers specified topics. The counseling must be done by a government-approved non-profit credit counseling organization no more than six months before filing for bankruptcy protection. This law is designed to prevent non-approved credit counselors from falsely holding themselves out to the public as businesses providing the required bankruptcy counseling when they are not properly authorized to do so. These unscrupulous businesses can take advantage of their customers’ dire financial situations by encouraging high interest loans to satisfy immediate debt, ultimately leaving the consumer in far worse financial status.
“Introductory Number 290-A complements the requirements of the Bankruptcy Prevention and Consumer Act of 2005 by requiring non-approved bankruptcy credit counselors to disclose their non-approved status in all forms of media. Further, this bill requires businesses that advertise credit counseling services to inform individuals that the business, if not approved pursuant to the Act, has not been certified. Such disclosures will help customers seeking bankruptcy counseling to avoid unscrupulous businesses that purport to offer the required credit counseling services.
“I would like to thank Council Member Gennaro, Consumer Affairs Commissioner Jonathan Mintz and all the agency staff who worked on this bill for their leadership and commitment to this issue.”
Stu Loeser / Jennifer Falk (212) 788-2958