AB 820

Under current law, an "adjustment service company" is an individual or

business entity engaged as principal in the business of prorating a debtor's income

to the debtor's creditors or of assuming a debtor's obligations to the debtor's creditors

in return for a service charge or other consideration. To engage in business as an

adjustment service company, the individual or business entity must be licensed by

the Division of Banking in the Department of Financial Institutions (division).

There are specified criteria for obtaining such a license and the division has

regulatory authority over licensees, including the power to regulate advertising and

solicitation and to investigate and examine licensees' books and records. If an

adjustment service company settles or reduces a debtor's accounts, the adjustment

service company must furnish the debtor, on demand, with a verified statement

showing the amount due creditors by the terms of the settlement or reduction.

This bill exempts from regulation as an adjustment service company any

attorney who resides, and is authorized to practice law, in this state.