AICCCA Member Offices Support Call to Action Plan

CTA Calls for Creditor Concessions to Help Consumer Repay Debt


FAIRFAX, VA - April 16, 2009 — The National Foundation for Credit Counseling (NFCC) recently issued a Call to Action to all credit card issuers on behalf of consumers. The Call to Action requests these creditors to work with credit counseling agencies to provide needed concessions for consumers who are struggling to repay credit card debt. The Association of Independent Consumer Credit Counseling Agencies (AICCCA) is in full support of the Call to Action and its member agencies, many of whom also belong to the NFCC, and look forward to the opportunity of implementing these much needed concessions for consumers.

"The Call to Action is a much needed avenue to help consumers avoid bankruptcy," said Dave Jones, president, AICCCA. "In general, credit card issuers are requested to develop and implement a Debt Management Program (DMP) that allows consumers to pay 2 percent or a hardship amount of 1.75 percent of the balance owed, while lowering the APR on the account to ensure balances can be paid in full within the 60 month regulatory guideline for repayment."

The Call to Action consists of the following concessions by card issuers and program guidelines for credit counseling agencies:


• Consumers will be enrolled in one of the two tiers based on a full budget review by the counseling agency that demonstrates that available cash, net of a maximum $200 monthly emergency cushion, is not adequate to meet the monthly contractual payments;



• Credit issuer will waive late and over limit fees, and program APR will be set, to ensure that the enrolled balances will liquidate within the 60 month regulatory guideline;



• Reage and default provisions will follow company current policies, although offering a "workout" reage to eligible clients and two missed payments before default is preferred;



• Consumers who can meet their monthly contractual payments with available cash, net of the emergency cash cushion, will not be eligible for a DMP; however, consumers whose available cash, net of the $200 cushion, is GREATER than a 2 percent fixed payment, but LESS than the full monthly contractual amount, WILL BE DMP eligible and must add that additional amount to the DMP fixed payment;



• In addition, to promote long-term financial health, all consumers enrolled in a DMP will be required to establish, and maintain, an emergency fund, contributing a minimum of $25 (and a maximum of the $200 emergency cash) monthly.


Founded in 1993, Association of Independent Consumer Credit Counseling Agencies (AICCCA) is a national membership organization, established to promote quality and consistent delivery of credit counseling services. AICCCA and its members are focused on improved creditor relations, efficient processes and advanced technology to best serve clients and creditors. AICCCA members are independent nonprofit agencies that advocate for debtors, counsel millions of consumers annually nationwide and provide debt management services to consumers with excessive unsecured debt. For more information or to contact an AICCCA member office call 866-703-TRUSTAICCCA (866-703-8787) or visit www.aiccca.org.

NFCC: The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior and build capacity for its members to deliver the highest quality financial education and counseling services. NFCC members annually help more than two million consumers through close to 850 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC member, call1-800-388-2227, (en Español 1-800-682-9832) or visit www.nfcc.org.