Whither Consumer Credit Counseling
Robert M. Hunt
Federal Reserve Bank of Philadelphia
For a half century, nonprofit credit counseling organizations have offered financial education and budget counseling sessions at nominal cost to borrowers. They also negotiate comprehensive repayment plans with a borrower's unsecured creditors. These repayment plans provide an alternative to bankruptcy that is valuable to many consumers. But credit counseling is not without controversy. In recent years, concerns about conflicts of interest and the emergence of a new breed of credit counselors have triggered significant legislative and regulatory activity and substantial restructuring of the industry.
Number of Pages in PDF File: 12
Keywords: Credit counseling, Debt management plans, Creditors' dilemma
JEL Classification: D180, G220, G330
Date posted: May 31, 2006