The Tennessee state legislature is working on a piece of legislation that would require debt management companies to obtain surety bonds.
The bill aims to safeguard Tennessee citizens who use debt management services. Due to the economy, many people are getting deeper and deeper into debt. Those who use debt management services should not be taken advantage of financially by companies who claim to help their clients get out of debt.
If this bill passes, debt management companies would have to
- post a surety bond or another security to protect the money received from clients
- obtain a license
- supply information about their employee qualifications, educational materials, practices and fees
- disclose that using the service may affect customers’ credit ratings
In this instance surety bonds would protect the clients who give credit payment money to the debt management companies. The surety bond would guarantee that the client’s money remained safe once in the possession of the company.
Tracking the Bill
Senator Doug Overbey introduced SB 812, called the “Uniform Debt Management Services Act,” back in February. On May 4, the Tennessee State Senate approved the bill, and the house approved it on June 8. The bill is currently still in the legislative process.