• Jeff Michael: Repair Your Credit and Knock Out Your Debt

    Jeff Michael: Repair Your Credit and Knock Out Your Debt
    I highly recommend this book because I wrote it.

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    Edie Milligan: Tips from the Top: Targeted Advice from America's Top Money Minds
    I have about a dozen entries in this book.

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« Speaking of Credit Education... | Main | And speaking of credit counseling... »


Thanks for this posting..but I have to disagree:

AADMO is circling the wagons... but whose in the camp?...AADMOs membership is not public, but I wouldn't mind betting Ameridebt was a proud member. I am sure some fine organizations are members but I'll bet that so are the major shady orgs are too.

Ok, so lets be idealist and leave ulterior motives aside; anyone who teams up to try and bridge the gap between those social service based NFCC members and the fly by night oufits with constantly changing names is going to have a serious credibiltity problem. Good luck to them, but if I was an exec with an agency with a good rep, I would think long and hard before putting my name to a draft standards document to present as the cure to the industry ills with the next Andreas Pukke's name right beside me.

Both NFCC and AICCCA do not seek to represent the whole industry. Here's AICCA's mission statement.

To act in association to deliver unparalled assistance to consumers in financial distress and to champion personal financial literacy.

To work together to facilitate a member-run and member-supported association in furtherance of the best interests of consumers, member credit counseling agencies, and credit granting partners.

I bet NFCC's is even more lofty.... note nothing about protecting the industry as a whole...... they have made a decision that I think is wise to not try to excuse the inexcusable. So why blame them?

These are scary times for the Cred Counbseling Industry and I'll bet of you asked NFCC/AICCCA Members whether their associations should be brokering common codes of standards with the groups in the sights of the IRS, you'll get a pretty short clear answer. I'm assuming their are such people reading this blog, so please tell me if I am wrong.

One last thing... NFCC's and AICCCA board of directors is made up of reps from members so I really don't understand the distinction between NFCC and its members. Maybe someone can explain this to me.


It's possible I'm being too hard on the NFCC and AICCCA. Maybe it's wrong to blame them for not doing enough to secure credit counseling's good reputation. And to be fair, I have seen a number of press releases from the NFCC lately defending their member agencies when congressmen and the like state falsehoods about the industry. I think I hold them to a higher standard, since the NFCC at one point pretty much WAS the credit counseling industry. It boggles my mind how much they've let it get away from them.

And as for those groups being made up of representatives from member agencies, for me the question really is "What role should a trade organization play for its industry?" What should the NFCC do and not do for an agency vs. what they leave that agency to do for itself? NFCC charges pretty hefty membership fees, and what does it give back? For the record, I think their standards are the best, and maintaining NFCC membership almost always guarantees integrity. So I'm pro-NFCC. But I want them to be smarter and better about getting clout and using it. They never seem to stand up to the creditors, ever. That's a shame.

So other than providing appropriately high standards of integrity and service delivery, what else do NFCC member agencies get for their membership dues? National advertising? Not much, from what I've seen. The right to use the "CCCS" name? Look at Springboard, Greenpath, MMI, and any number of other NFCC agencies who don't call themselves "CCCS of XXX"anymore. Really, the best thing the NFCC offers is counselor certification that's actually somewhat meaningful.

Of course, a lot of other people could better speak to these issues. Dianne, I'm looking in your direction...

Regarding the comment on AADMO, you may be surprised to hear that I think they do a very good job as a trade association. We're going to be joining them in fact (we're also a member of AICCCA & NFCC). Do I care if Ameridebt is a member? Actually no (Ameridebt is not a member, although they may once have been and they're dead now anyway). AADMO does not limit their members via specific standards, so vendors to our industry and other non-credit counselors can join. It's just a different association model. There are some big picture questions in our business and all of the various players bring a different and valuable perspective. I know that's a worthless kumbaya statement, but limiting one's perspective to that of a particular group is usually a recipe for defeat. "Group think" has had a long history with the NFCC and look where it's gotten them. The AICCCA culture was very different - the member agencies did not need their association to figure out their individual competitive strategies for them AND expect the dues of other members to foot the bill for this. More on this some other time unless Jeff kicks me off his blog, but it speaks to d.jacobs' insightful question about the difference between the two.

Should credit counselors be for-profit or nonprofit only? Even though a non-profit only model would help the agency I'm with, it's hard for me to come down on the side of limiting choice and any sort of protectionism - hallmarks of the NFCC-type agencies. Why shouldn't somebody be able to hire someone like the brilliant and articulate Steve Rhode of Myvesta as their money coach? FAR BE IT FOR ME to define quality for consumers, as much as I may want to and think that my definition is the only viable one. That being said, Bill Binzel of the NFCC articulated a cogent argument for nonprofit only credit counseling in his testimony to the state of Maryland recently. I assume this is public record and it should be posted at our website (in the press section). There are some perverse business dynamics between those of us that are nonprofits and those that are not so how do you level the playing field in a way that limits predation but not choice? I'm still trying to figure it all out so bear with me for sounding equivocal, but looking to regulation to "save" your business always sets in motion unintended consequences as does limiting choice for consumers. So, I'm glad that there's an AADMO and AICCCA to add to the dialogue.

Dianne Wilkman

The current credit counseling situation reminds me a lot of the emotions that people with debt experience. I’m afraid that most people are so close to the situation that they don’t see the bigger issues.

In my humble opinion all of the current chatter only causes us to lose perspective of what our primary focus should be, the client. Without a doubt the consumer in trouble should be at the center of our attention.

Too much effort and discussion is spent trying to establish camps or engage in protectionism for the industry. And all of this is to the detriment of the industry.

If the industry truly put caring for people first there would be at least some effort to further real options for consumers in trouble. Does anyone see the elephant in the room?

I think the largest problem facing the industry today is not for profit vs. nonprofit, or AICCA, AADMO, NFCC. I think it is the lack of viable options for consumers in trouble. Counseling agencies only really have one tool to offer, the DMP. Sadly the DMP has become effectively a creditor controlled product and the agencies act as a delivery channel and nonprofit DMP agencies are very close to being labeled debt collectors rather than impartial third-party advisors.

In a better world, agencies would truly be independent entities that place the client in the center and work in a collaborative fashion to put together the best possible customized solutions to meet the situation. These solutions take time and time is money. If agencies want to be able to offer these best-case-solutions it will require expert staff and the willingness and ability to charge fees for services.

I am very disappointed in the industry in general for backing away from embracing fees for services. If we truly had the interest of the consumer in mind we would not spend so much time trying to exclude organizations or engage in protectionist activities through legislation. Instead we should be innovative and leading the way for all agencies in developing programs that do a better job of delivering the needed resources for people in trouble.

Bottom line is that there should be ample room in the credit counseling world for consumer choice. In the medical world you have treatment options from the Medicaid clinic to the most advanced private pay medical centers in the world. So why is it that there exists no advanced treatment center in the credit counseling industry? Why do we fight it?

At Myvesta I created an advanced treatment facility. We had staff employment specialists, negotiators, attorneys, psychiatrists, tax specialists and others. Our goal was to create a collaborative team, with the client at the center, to put in place big plans to make real differences. I can tell you from my personal experience when we approached agencies to introduce them to our concept that the general response was that they did not want to refer for fear of either losing a client or looking like they did not offer the most comprehensive solutions. As one agency president told me, “We use the DMP intake to separate the wheat from the chafe. If they can’t afford the DMP then I don’t have any further use for them.” Comments like that make me want to puke.

As an industry we have the opportunity to do good, to improve lives and to make a positive difference in the futures of good people. Maybe I’m too much of a dreamer but I believe that if the industry refocused its attention to doing the best overall job for the client that good things would come of that.

In the meantime all of the current flailing about and punitive action simply erodes time that could be better used moving the health and happiness of our clients forward.

Funny how the credit counseling industry is so caught up with a few "accrediting organizations" that really serve no purpose other than to boost ego and fool the public into thinking they are reputable. I mean Ameridebt was a member of one I'm sure, and look what they were doing. The governing bodies just assign membership and host annual meetings. Why don't THEY audit their members to make sure they are following the code of ethics, rules, by laws, etc? I have never seen such a backwards industry. I'm starting my own organization. One that assigns membership, but also trains the new member companies on the standards and annually audits them to make sure they are following them. And to make sure it's all on the "up and up", audit findings will be made public. Anyone interested in joining me on this venture? ;)

Steve Rhode posted:
"I think the largest problem facing the industry today is not for profit vs. nonprofit, or AICCA, AADMO, NFCC. I think it is the lack of viable options for consumers in trouble. Counseling agencies only really have one tool to offer, the DMP. Sadly the DMP has become effectively a creditor controlled product and the agencies act as a delivery channel and nonprofit DMP agencies are very close to being labeled debt collectors rather than impartial third-party advisors."

I disagree here. DMP's are not the only answer. All too many companies push these on consumers who don't even need them in the first place. A DMP is not a solution. Changing the way that the client lives, so they can afford a normal life is a solution. Helping them get better pay, lowering expenses, etc. Those are solutions that DMA's have yet to explore. Instead of working with just creditors who pay fairshare, why not work with utility company's to setup temporary hardship plans, etc. People (CEO of DMA's) just aren't using their heads.

Keith, everything you're suggesting sounds like the NFCC to me. Member agencies have to have third-party accreditation, which includes independent audits. As 501 (c) 3 nonprofits, they have to make their 990s public (check out to look them up).

The only drawback to the NFCC is the high level of creditor control, and the lack of "viable options" as Steve put it. Too few NFCC member agencies offer services other than DMPs.

Springboard, a member of NFCC, AICCCA, and (soon) AADMO, offers DMPs, Debt Settlements, credit education, tax preparation, and yes, bankruptcy referrals--whatever the client needs. They've got a CEO who uses her head.

I support the NFCC's use of COA as an accreditation standard, but I'm also open to the things the other trade organizations offer--AADMO in particular is a far better lobbying organization for the industry, and AICCCA works harder on behalf of members to ensure good public relations (that is, they write more and better press releases). But neither has the quality of counselor certification that NFCC offers. And none of that has anything to do with fooling the public. AICCCA dropped BSI as their ISO:9000 accrediting agency when BSI approved Ameridebt, and I don't think they would ever have allowed Ameridebt to join the organization.

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