Date: 02/20/2006

Final
BILL SUMMARY for HB06-1280

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View--> Action Taken:
Moved amendment L.001 (Attachment K). Representat
Moved to refer House Bill 06-1280, as amended, to 		Pass Without Objection
PASS



02:20 PM -- House Bill 06-1280

Representative McGihon, prime sponsor, presented House Bill 1280 and distributed a handout (Attachment G). There was also a handout from the United States Organizations for Bankruptcy Alternatives distributed to the committee (Attachment H). Representative McGihon explained that the bill is a Uniform Debt-Management Services Act. It would establish the regulation of the debt-management service industry within the Department of Law. The bill would also establish rules of the profession and requires that all debt-management entities register with the Attorney General. Representative McGihon went through the provisions of the bill. There was a request from the committee for clarification of the fee schedule.

02:44 PM -- Laura Udis, representing the Attorney General's Office, answered questions pertaining to the number of complaints the Attorney General's Office has received on debt-management services and excessive fees. Committee discussion followed about the extent of the problem with debt-management services.

02:51 PM -- Sara Allen, representing Consumer Credit Counseling Service, testified on the bill. She stated she has some concerns about certain provisions in the bill. Ms. Allen gave some background about consumer counseling services: how they work, and who they help. She talked about debt service programs and what they are. Ms. Allen spoke about the provision of the bill that talks about the deadlines that must be disclosed. Representative McGihon stated that she would be happy to address her concerns on second reading. There was committee discussion about the provision in the bill that concerns nonprofit and for-profit services.

03:03 PM -- David Emerick, HSBC and Colorado Financial Services Association, testified in support of the bill. He stated that the bill is a good step to have some regulation and oversight over the bad actors in the debt-management service industry.

03:05 PM -- Tami Brown, representing the Association of Settlement Companies, a trade association for the for-profit model of debt-management services, testified in opposition of the bill. She stated that her industry would requests the committee- remove the for-profit services from the bill as Texas had done. Ms. Brown expressed concern with the hefty insurance requirements in the bill. Ms. Brown explained that the fees are higher with for-profit companies because they are not subsidized by the credit card companies, they solely work on behalf of the consumer.

03:15 PM

There was committee discussion about the various charges stipulated in the bill on page 38. Representative Penry asked for Ms. Brown to expand on the Texas model. Ms. Brown discussed Senate bill 1112 that was passed in Texas.

03:23 PM -- John Bergland, representing Money Management International, a group of credit counseling services organizations, testified in support of the bill, with a few concerns. He distributed a handout to the committee (Attachment I) and responded to previous questions. He stated Ms. Ellen touched on many of their concerns. There was a question from the committee about how the nonprofit and for-profit industries should be regulated differently. Representative McGihon stated that she would like to work on some second reading amendments with Mr. Bergland based on the suggestions offered in Attachment I. There was a request from the committee for clarification on settlement fees.

03:36 PM -- Renee Beauregard, representing Consumers United Association, testified in support of the bill.

03:40 PM -- Nancy Burke, representing the Colorado Credit Union League, testified in support of the bill. She stated that credit unions offer credit counseling as well, but if a member goes to a credit counseling service instead, the credit unions would rather they go to an accredited counselor as proposed in the bill.

03:41 PM -- Darrin Sandoval, representing Money Management International, stated that he has nothing to add to previous comments by Mr. Bergland and Ms. Allen, but would be happy to answer any questions.

03:42 PM -- Joanne Kerstetter, representing Money Management International, testified in support of the bill. She expressed her concern with the bill if the Internal Revenue Service were to pull the 501(c)(3) classification.

03:42 PM -- Don Meilke, Commissioner of Uniform State Laws, testified in support of the bill. He distributed a few handouts (Attachment J). He stated this legislation passed in Utah unanimously, and explained that the Texas statute that was discussed earlier by Ms. Brown was not the same as House Bill 1280.
BILL:HB06-1280
TIME: 03:49:39 PM
MOVED:Coleman
MOTION:Moved amendment L.001 (Attachment K). Representative McGihon explained that L.001 amends the bill so that the costs and fees are within the same year. The motion passed without objection.
SECONDED:Carroll M.
VOTE
Balmer
Borodkin
Butcher
Carroll M.
Coleman
Knoedler
Liston
McCluskey
Paccione
Penry
Welker
Cerbo
Marshall
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:HB06-1280
TIME: 03:51:01 PM
MOVED:Marshall
MOTION:Moved to refer House Bill 06-1280, as amended, to the Committee on Appropriations. The motion passed 11-1.
SECONDED:Coleman
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
Yes
Carroll M.
Yes
Coleman
Yes
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Excused
Welker
No
Cerbo
Yes
Marshall
Yes
Final YES: 11 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS