Nonprofit counseling agencies that provide debt management plans are strongly and thoroughly regulated by the Internal Revenue Service, not only in Pennsylvania but nationwide. There are also regulations through the Federal Pension Protection Act of 2006 and the Pennsylvania Debt Pooling Statute.

Certifying organizations recognized by the IRS, among them the National Foundation for Credit Counseling, set standards for its member agencies that include reasonable fees, education, trust accounts and other ethical standards that AADMO claims are missing.

There is an all-out nationwide effort to change state laws to allow for-profit companies to operate because the IRS is revoking the status of for-profit debt-management agencies that are currently masquerading as nonprofit credit-counseling agencies.

The negative impact of permitting for-profit companies to operate absent the restrictions on nonprofit agencies is clear. A for-profit company exists to make a profit off its customers, but a nonprofit exists to profit its customers. Where the IRS finds that a nonprofit does not conform to that high standard, it is stripped of its status and many then choose to operate as for-profit firms.

The assertion that nonprofits are operating in Pennsylvania as lawless agencies is incorrect. The issue in relation to credit counseling has been addressed. To claim otherwise is nothing more than an attempt to push through legislation that would allow for-profit companies to work in the state outside the consumer protection instituted by the IRS and Congress.

Stephen J. Piotrowski

President/CEO

Advantage Credit Counseling Service

Patricia Hasson, President/CEO CCCS of Delaware Valley