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On August 17, 2006, President Bush signed into law H.R.4, referred to as the Pension Protection Act of 2006. In addition to pension law reforms, H.R.4 includes new standards for Credit Counseling Organizations that will have a sweeping effect on the industry.

 

"Advantage Credit Counseling Service, Inc. (ACCS) welcomes the reforms proposed by H.R.4,” says Stephen Piotrowski, President and CEO.” As a legitimate non-profit agency committed to offering educational information to the public regarding budgeting, personal financial management and the wise use of credit; we would like to see the predatory and deceptive agencies chased out of the industry.”

 

In accordance with the new laws, for a credit counseling agency to retain its 501(c)(3), non-profit status the organization: cannot gain more than 50% of its revenue from creditors or debt management program fees; must tailor credit counseling to specific needs of individuals; is required to provide services even if an individual is unable to pay; does not make any loans to debtors nor negotiate the making of loans on their behalf; and cannot own more than 35% of an entity which lends money, repairs credit or processes payments.

 

These new standards are, in part, due to findings of IRS audits of 63 “non-profit” credit counseling agencies, which represent more than 40% of the revenue in the industry. Over the past two years, the IRS has investigated these “non-profits,” and as of May 2006 had completed 41 audits—all of which resulted in the revocation, proposed revocation, or other termination of tax-exempt status.

 

 “Advantage Credit Counseling Service, Inc. has always held to the highest standards of the industry, and stands with the National Foundation for Credit Counseling (NFCC) in commending the President and Congress for protecting the American consumer from agencies who seek to only gain profit, while falsely promising sound financial educational services,” declares Piotrowski.

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