50-1120. Same; duties of registrant.

50-1120

Chapter 50.--UNFAIR TRADE AND CONSUMER PROTECTION Article 11.--CREDIT SERVICES ORGANIZATIONS

      50-1120.   Same; duties of registrant.No credit services organization shall engage in debtmanagementservices unless:

      (a)   The registrant provides the consumer with a credit education programdesigned to improvethe financial literacy of the consumer.

      (b)   The registrant has:

      (1) (A)   Taken reasonable steps to identify all creditors of a consumer; and

      (B)   prepared and provided to the consumer a written financial analysis of andinitialbudget plan for all of the consumer's debt obligations which indicates theconsumer canreasonably meet the requirements set forth in the budget plan; and

      (2)   provided to the consumer a list of each creditor the registrantreasonably expects:

      (A)   To participate in the plan; and

      (B)   not to participate in theplan.

      (c)   The registrant and the consumer have entered into a written debtmanagement servicesagreement and a copy of the signed agreement has been provided to the consumerby theregistrant. Such agreement shall be in at least 12 point type, signed and datedby the consumerand registrant and include:

      (1)   The name, address, and phone number of the consumer and the registrant;

      (2)   a description of the debt management services to be provided to theconsumer and anitemization of any fees to be charged to the consumer;

      (3)   a notice of the consumer's right to rescind the debt management servicesagreement at anytime by giving written notice of rescission to the registrant;

      (4)   a schedule of payments, including the amount and due date of eachpayment, that theconsumer must make to the registrant for disbursement to such consumer'screditors;

      (5)   a list of each participating creditor of the consumer to which paymentswill be made by the registrant under the debt management services agreement.The listing shall include the:

      (A)   Amount owed to each creditor;

      (B)   amount of each payment;

      (C)   date on which each payment will be made; and

      (D)   anticipated payoff date for each creditor;

      (6)   the name of each creditor that the registrant reasonably expects not toparticipate in the debtmanagement plan;

      (7)   a disclosure that the registrant also may receive compensation from theconsumer's creditorsfor providing debt management services to the consumer;

      (8)   a disclosure that the registrant may not, as a condition of entering intoa debt managementservices agreement, require a consumer to purchase any other product orservice, nor solicit oroffer to sell any other product or service to the consumer during the term ofthe debt managementservices agreement;

      (9)   a disclosure that the registrant may not require a voluntary contributionfrom a consumer forany service provided by the registrant to the consumer;

      (10)   a disclosure that, by executing the debt management services agreement,the consumerauthorizes any financial institution in which the registrant has established atrust account for thedeposit of the consumer's funds to disclose to the commissioner any financialrecords relating tothe trust account during the course of any investigation or examination by thecommissioner; and

      (11)   the following notice: "The Kansas Office of the State Bank Commissionerwill acceptquestions and complaints from consumers regarding (name and registration numberof registrant)at 700 SW Jackson, Suite 300, Topeka, Kansas, 66603, or by calling toll-free1-877-387-8523".

      History:   L. 2004, ch. 22, § 5; July 1.