Mark Guimond, Executive Director of the American Association of Debt Management Organizations (AADMO) testified today before the Economic Matters Committee of the Maryland House of Delegates on amendments to the state's Debt Management Services law.

The legislation (HB 753) would enhance provisions of the state's law governing the credit counseling industry by giving regulators greater access and control to the records of licensees and applicants and prohibiting transactions between related organizations.

The credit counseling industry's largest trade association, through Mr. Guimond, warned the Committee against overly broad legislation that could have far reaching and unintended consequences. He testified that all related party transactions between non-profit credit counseling agencies and for-profit affiliates are not all inherently subject to concern. He said, "a system that is transparent and subjects licensees to market-based transactions may be a fair and reasonable alternative to an outright prohibition on these transactions".

Guimond further said, "our organization, indeed our entire industry, is extremely cognizant of, and sensitive to, the fact that many of the abuses you seek to correct happened here in Maryland under the Ameridebt umbrella of companies. The credit counseling industry is a great benefit to the financially distressed consumers of this nation. AADMO members and others work steadfastly each and every day to help millions of consumers to regain their financial health and alleviate the need for bankruptcy."

Although not part of the legislation at issue in today's hearing, Mr. Guimond was asked for his opinion about the opening of credit counseling to "for-profit" companies. He said, "if the industry is to be opened to for-profit organizations, there would have to be a strict prohibition on creditors, collection agencies and others holding or controlling consumer debts from also being a creditor counselor."

Of the 42 Debt Management agencies currently licensed by the state of Maryland, 23 of those agencies are AADMO members. Taken another way, if companies not operating on a national basis are excluded, AADMO members are 23 of the 32 licensed independent interstate agencies.