HB 734 — Modernize Debt Settlement Prohibition.

GENERAL ASSEMBLY OF NORTH CAROLINA H.B.SESSION 2025 H 1 HOUSE BILL 734 Short Title:

734 Apr 2, 2025 SESSION 2025 HOUSE PRINCIPAL CLERK H D HOUSE BILL DRH10302-MU-33 Short Title:

RepresentativeRepresentatives Howard.Howard, Setzer, B.

Jones, and Liu (Primary Sponsors).

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Judiciary1, if favorable, Finance, if favorable, Rules, Calendar, and Operations of the House April 3, 2025 A BILL TO BE ENTITLED AN ACT TO MODERNIZE AND EXPAND THE PROHIBITION OF DEBT SETTLEMENT BY MAKING DEBT SETTLEMENT AN UNFAIR TRADE PRACTICE, CLARIFYING THE DEFINITION OF DEBT SETTLEMENT, EXPANDING CIVIL REMEDIES AVAILABLE TO DEBTORS, AND LIMITING DEBT SETTLEMENT ACTS THAT ARE AUTHORIZED AND TO MAKE OTHER ADMINISTRATIVE AND TECHNICAL CHANGES.

Debt adjusting includes the business or practice of any person who holds himself out as acting or offering or attempting to act for consideration as an intermediaryintermediarybetween between a debtor and *H734-v-1* General Assembly Of North Carolina Session 2025 his creditors for the purpose of settling, compounding, or in any way altering the terms of payment of any debt of a debtor, and to that end receives money *DRH10302-MU-33* General Assembly Of North Carolina Session 2025 or other property from the debtor, or on behalf of the debtor, for the payment to, or distribution among, the creditors of the debtor.

– The business whereby any person holds himself or herself themselves out as acting for consideration as an intermediaryintermediarybetween between a debtor and one or more of the debtor's creditors for the purpose of reducing, settling, or altering the terms of the payment of any debt of the debtor, whether or not the person distributes the debtor's funds or property among the creditors, and receives a fee or other consideration for reducing, settling, or altering the terms of the payment of the debt in advance of the debt settlement having been completed or in advance of all the services agreed to having been rendered in full.debtor.

(3a) "Nominal consideration" means a fee or a contribution to cover the cost of administeringadministeringa a debt management plan not to exceed fortyfortydollars dollars ($40.00) for origination or setup of the debt management plan and ten percent (10%) of the monthly payment disbursed under the debt management plan, not to exceed forty dollars ($40.00) per month.

Page 2 House Bill 734-First Edition General Assembly Of North Carolina Session 2025 "§ 75-155.

Page 2 DRH10302-MU-33 General Assembly Of North Carolina Session 2025 The following individuals or transactions shall persons are not be deemed debt adjusters or as being engaged in the business or practice of debt adjusting:adjusting or debt settlement:

(4)(5) Any person who that at the request of a debtor, debtor arranges for or makes a loan to the debtor, debtor and who, at the authorization of the debtor, acts as an adjuster of the debtor's debts engages in debt adjusting in the disbursement of the proceeds of the loan, loan without compensation cost to the debtor for theservicesrenderedin adjustingadjustingsuchdebts.thedebts,exceptinterest suchdebts.thedebts,exceptinterest andfees authorized by law.

House Bill 734-First Edition Page 3 General Assembly Of North Carolina Session 2025 e.f.

DRH10302-MU-33 Page 3 General Assembly Of North Carolina Session 2025 f.g.

Page 4 DRH10302-MU-33House Bill 734-First Edition