ASSEMBLY REGULATED PROFESSIONS COMMITTEE
STATEMENT TO
ASSEMBLY, No. 4598
with committee amendments
STATE OF NEW JERSEY
DATED: APRIL 10, 2025
The Assembly Regulated Professions Committee reports favorably
and with committee amendments Assembly Bill No. 4598.
As amended, this bill allows certain for-profit debt adjustment
companies to conduct business in the State. A debt adjuster is 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.”
The bill would provide that for-profit debt adjusters are not
subject to the bonding requirements that apply to nonprofit social
service agencies and nonprofit consumer credit counseling agencies
that perform debt adjuster services in the State. 2
The bill would also provide that the annual report that the
commissioner may require a licensed nonprofit social service agency,
nonprofit consumer credit counseling agency, or for-profit debt
adjuster to file is to include the total number of active consumers in
the State, the total number of enrolled consumers in the State, the
total fees collected in the State, and the total amount of debt settled
in the State. It also provides that if a licensee fails to file an annual
report, the licensee will be subject to penalties available under current
law.
The bill also requires for-profit debt adjuster licensees that enter
into an agreement with a debtor to disclose certain information to
the debtor.
Lastly, the bill clarifies language about persons engaged in the
practice of law that are not deemed to be debt adjusters.
As amended and reported by the committee, Assembly Bill No.
4598 is identical to Senate Bill No. 1310 (2R), which was also
reported by the committee on this date.
COMMITTEE AMENDMENTS:
The committee amended the bill to:
(1) provide that the annual report that the commissioner may
require a licensee to file is to include the total number of active
consumers in the State, the total number of enrolled consumers in the
State, the total fees collected in the State, and the total amount of debt
settled in the State;
(2) provide that if a licensee fails to file an annual report, the
licensee will be subject to penalties available under current law;
(3) delay the effective date to 180 days after enactment; and
(4) make a technical update.