The National Foundation for Credit Counseling Leads Industry into New Era

The National Foundation for Credit Counseling (NFCC) President and CEO Susan C. Keating says the NFCC is taking a leadership role in its industry by expanding services to meet demands created by a new federal bankruptcy law and by helping weed out the “bad apples” in the industry that are abusing the title of “nonprofit.” The new bankruptcy law takes effect on October 17.

In her recent “2005 State of the Credit Counseling Industry” address to the NFCC’s Leaders Conference in Albuquerque, Keating highlighted an ambitious agenda for demonstrating “the NFCC difference” by continuing to provide low-fee counseling services to a growing number of consumers even as the credit counseling industry faces a growing funding challenge.

Following are highlights from Keating’s September 20 remarks. The full text is available within the newsroom at www.nfcc.org:

“Last year, even without the mandate that Americans participate in credit counseling in connection with bankruptcy, NFCC member agencies provided some 800,000 counseling sessions to individuals and families…. the doors of NFCC agencies are open to each and every person who asks for help. We do not turn people away because they have trouble paying a fee, because they have only minimal amounts of debt, or because we do not have relationships with specific creditors. Nor are we predisposed toward any particular solution, or believe that one-solution-fits-all. Our member agencies work closely with each client to fully understand his or her unique financial situation to help find a customized solution that best fits the client’s circumstance.”

“Consumers’ needs for the services we provide are greater than ever. In addition to the new demand created by bankruptcy reform, a national lifestyle that exalts spending and devalues saving is pushing debt to record levels. While most Americans seem to find a balance that enables them to taste the pleasures of consumption and manage their debt levels, many Americans stumble off this economic tightrope. … a greater percentage of the population every year is at risk for the types of financial problems that will bring them to a credit counselor’s door.”

“Creditors, historically the primary source of the money that funds client-oriented, nonprofit credit counseling agencies, are facing increasing pressure on their profits…. Any way you slice it, support from the traditional funders is now harder to come by.”

“After almost a year of intense and challenging discussions, the NFCC has succeeded in securing substantial new funding from the creditor community to help our industry provide the services required by the new (bankruptcy) law.”

“This funding is precedent-setting, because it represents the first time that these top creditors will work together to address agencies’ pressing financial needs created by the new bankruptcy law.”

“We are leading the fight for standards that will help weed out the bad apples from our industry and also reassure consumers that when it comes to credit counseling agencies that the word ‘nonprofit’ means exactly what it is supposed to.”