Sentences with phrase «exempt nonprofit credit counseling»

Moreover, in this line of cases, there already had been a decision that adopts a two - part test for bona fide tax - exempt nonprofit credit counseling agencies, requiring such agencies to: (1) be recognized by the IRS as being exempt from federal income taxation under section 501 (c)(3) of the Internal Revenue Code; and (2) actually operate as a bona fide nonprofit organization.

Not exact matches

Put simply, the door is now wide open for class action lawsuits targeting credit counseling agencies — regardless of tax - exempt or nonprofit status — based on nothing more than the agencies» provision of DMP plans (that are incidental to the education and counseling provided by the agencies).

Despite a stated exemption for tax - exempt, nonprofit organizations in CROA, the broad interpretation of the statute adopted by the First Circuit may, unfortunately, lead to a wave of litigation against legitimate nonprofit credit counseling agencies that provide invaluable assistance to consumers in financial distress.

The ruling heightens the risk, particularly for credit counseling agencies doing business in the First Circuit (encompassing Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island), that their activities, especially their DMPs and less - than - full balance repayment programs, may trigger coverage under CROA and give rise to class action litigation, forcing them — at great expense — to prove that they are actually operating as bona fide nonprofit organizations (in order to be exempt from CROA, particularly for what has transpired in the past), or, alternatively, to comply with CROA's requirements prospectively.

As you know, the FTC does not have oversight of any nonprofit, tax - exempt credit counseling or debt relief agencies.