Other states either prohibit for-profit debt settlement services, impose fee structures that predated the Telemarketing Sales Rule, or do not establish a fixed maximum percentage that such companies may charge under a “percentage of debt” or “percentage of savings” model.
8. Anticipated economic impact of implementing the rule (note if the rule is likely to have a significant economic impact on small businesses):
As noted in section 6 above, the proposed rule seeks to authorize additional fee structures that align with the requirements of the Telemarketing Sales Rule, but it would not eliminate or reduce the maximum fees that current licensees may charge under existing fee structures authorized by Wis. Admin. Code ch. DFI-Bkg 73. For that reason, the Division does not anticipate the proposed rule would materially impact existing licensees. For consumers, updating Wis. Admin. Code ch. DFI-Bkg 73 to allow alternative fee structures subject to fee caps is likely to increase the number of licensees offering debt settlement services, better ensure that such companies will address consumer complaints (because their license may be at risk if they do not), and better safeguard them from being charged unreasonable fees for the services provided. Contact Person:
Matthew Lynch
Chief Legal Counsel
Wisconsin Department of Financial Institutions
PO Box 8861
Madison, WI 53708-8861
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