Bill > S491

This bill establishes the North Carolina Debt Settlement Services Act, creating a comprehensive regulatory framework for companies offering debt settlement services in the state. The bill requires debt settlement service providers to obtain a license from the Commissioner of Banks, post a $1 million surety bond, and meet strict operational standards. Key provisions include mandating detailed agreements with consumers, prohibiting upfront fees, limiting service fees to a percentage of debt savings, and establishing strict disclosure requirements about potential impacts on a consumer's credit. Licensees must provide transparent information about their services, including potential risks such as credit score damage and potential legal actions by creditors. The bill includes robust reporting requirements, allowing the Commissioner to investigate and examine licensees, and provides mechanisms for enforcement, including civil penalties, potential license revocation, and the ability for consumers to bring private legal actions. The legislation aims to protect consumers by creating clear guidelines for debt settlement services, ensuring transparency, and preventing predatory practices. Notably, the bill specifically excludes certain financial institutions, nonprofit credit counseling organizations, and lawyers from licensing requirements. The act will become effective on January 1, 2026, giving businesses time to prepare for the new regulatory environment.

https://www.ncleg.gov/BillLookUp/2025/S491