ASSEMBLY STATE AND LOCAL GOVERNMENT
COMMITTEE
STATEMENT TO
ASSEMBLY, No. 1739
with committee amendments
STATE OF NEW JERSEY
DATED: JANUARY 4, 2024
The Assembly State and Local Government Committee reports
favorably and with committee amendments Assembly Bill No. 1739.
As amended, this bill would allow certain for-profit debt
adjustment companies to conduct business in the State. A debt
adjuster means 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” at 16 C.F.R. 310.4.
The bill would provide that for-profit debt adjusters shall not be
subject to the bonding requirements that apply to nonprofit social 2
service agencies and nonprofit consumer credit counseling agencies
that perform debt adjuster services in the State.
COMMITTEE AMENDMENTS:
The committee amendments clarify language about persons
engaged in the practice of law that are not to be deemed debt adjusters.