Summary of New Jersey Senate Bill No. 2989
In September 2022, we provided a regulatory update about the then-recently proposed New Jersey Senate Bill No. 2989 (“NJ S.B. 2989”) entitled, “Makes certain for-profit debt adjusters eligible for licensing to conduct business in State.”1 If signed into law, the proposed legislation would allow for certain debt-adjusting entities to operate within the State of New Jersey. The Bill seeks to amend existing legislation in New Jersey that does not currently allow for-profit entities to obtain a debt adjustment license.2
On January 8, 2024, NJ S.B. 2989 passed both houses in New Jersey and now awaits approval by Governor Phil Murphy. In its current form, the proposed Bill would allow certain for-profit debt adjustment companies to conduct business in the State.3 Under New Jersey’s current “debt adjusters law,” only non-profit social service agencies and non-profit consumer credit counseling agencies may operate debt adjustment services in the State. Because the Bill was proposed by Democrats and received overwhelming support across party lines when it passed both houses, there is no apparent reason to expect that the Bill will not be signed into law. We will continue to monitor the activity of NJ S.B. 2989 and provide ongoing alerts.
Who proposed New Jersey Senate Bill No. 2989?
NJ S.B. 2989 was introduced September 22, 2022, and is primarily sponsored by State Senator Nellie Pou (D) of District 35 and Senator Robert W. Singer (R) of District 30, and primarily co-sponsored by Senators Gordon M. Johnson (D) of District 37, and Samuel D. Thompson (D) of District 12.4
Would New Jersey Senate Bill No. 2989 affect debt service companies?
The proposed Bill would create an exception to the current law to allow certain for-profit debt adjustment companies to conduct business in the State, subject to certain requirements. These requirements include that the company (1) does not receive or hold consumer funds; and (2) is regulated by the Federal Trade Commission (FTC).
The proposed legislation will subject for-profit debt adjuster companies to the same licensing requirements and regulations as non-profit entities that provide debt adjustment services in New Jersey.5 However, these debt adjustment service providers can only operate under certain conditions. If the proposed Bill goes into effect, a for-profit debt adjuster would not be required to provide a certification about salaries and expenses as part of its annual audit. Also, 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.6
In addition, the Bill would provide that for-profit debt adjusters would not be subject to the bonding requirements that apply to non-profit social service agencies and non-profit consumer credit counseling agencies that perform debt adjuster services in New Jersey.
Current Status of NJ S.B. 2989
As of January 8, 2024, the Bill passed both houses in New Jersey. Once signed into law, the proposed Bill states that it will immediately take effect.
If you would like to discuss more about how proposed legislation NJ S.B. 2989 could affect your business, please contact Shipkevich PLLC through our website.
1 2023 Bill Text NJ S.B. 2989.
2 N.J.S.A. § 17:16G-1.
3 2023 Bill Text NJ S.B. 2989.
4 See 2022 Bill Text NJ S.B. 2989.
5 2023 Bill Text NJ S.B. 2989.
6 See 2022 Bill Text NJ S.B. 2989, and 16 C.F.R. § 310.4.