The issue of debt settlement throughout the United States is fraught with complexity. Currently, there are some efforts in place attempting to simplify the process and make it easier for the end user to access and put to work. One new measure from the Maryland state government may help on this front, as debt settlement services will have some new rules to work under.
The new rules, approved by Maryland’s governor under Chapter 90, establish a new requirement for those offering debt settlement services. Specifically, they will now need to both obtain and maintain unique identifiers within the state. Additionally, they will also be obligated to transfer information about their registration of said identifiers to the Nationwide Mortgage Licensing System and Registry (NMLS) during a specific time frame.
Additionally, the Commissioner of Financial Regulation will be required to notify registrants of the relevant transfer period, and also require applicants to register through NMLS. There’s an added benefit for those debt settlement services agencies, however, as the fee for issuing or renewing registration has been reduced from its original $1,000 to just $400.
A supplementary fiscal and policy note from the Maryland government revealed that the move would decrease special fund revenues substantially in fiscal year 2020, lowering them $8,400, but that loss would immediately taper off starting in fiscal year 2021, where the amount would decline to $2,800 lost. It would then remain static at $2,800 a year lost until fiscal year 2024, where the projections stop. There was no discernible effect projected for expenditures, however. The new rules are slated to take effect July 1, 2019.
Essentially, reports note, the new rules are a continuation of previous efforts going back to 2011 to regulate debt settlement services in the state. Originally, debt settlement services were required to register with the OCFR, but it recently advised the state that it was moving its license processing operations to NMLS. Thus, in a bid to streamline the system, a move to encourage registration with NMLS made sense. OFCR even noted that Maryland law would already require adjustment to line up with NMLS’ registration operations accordingly.Image Credit: Ft. George G. Meade via CC Licensing