ACDR Statement on the Discussion Draft of the“Debt Settlement Consumer Disclosure Act’’

The Discussion Draft of the Debt Settlement Consumer Disclosure Act, endorsed by the American Financial Services Association (AFSA), proports to strengthen transparency and consumer protection, but AFSA members’ history of consumer exploitation exposes the bill’s true intention—to create a barrier between financially distressed Americans and a lawful, federally regulated debt relief option that helps them out of debt traps.

AFSA’s own members have faced repeated allegations involving hidden add-on products, unnecessary insurance, and other costly practices most recently seen in a bipartisan, multistate attorneys general lawsuit filed earlier this year against OneMain Financial. These are not the actions of a consumer advocate. They are the actions of an industry that profits when consumers remain in debt.

Debt relief represents the opposite incentive. Under existing federal law, debt relief providers cannot collect a fee unless they first negotiate a settlement, the consumer approves the settlement, and the consumer makes a payment towards the settlement. ACDR's accredited members succeed only when consumers succeed, negotiating settlements that save Americans nearly $2 billion every year.

Consumers deserve strong protections and meaningful options for managing their debt. The existing federal framework—including the FTC's Telemarketing Sales Rule—already provides both, with consumer complaints pertaining to debt relief making up just 0.05 percent of CFPB complaints. Congress should focus on enforcing the laws that protect consumers, not limiting access to one of the most effective tools available for families struggling with overwhelming debt.