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Credit Counseling Industry Standards Council to Hold Drafting Session

In the wake of denials and revocations of tax-exempt status to credit counseling agencies by the Internal Revenue Service (IRS), mandates for credit counseling in the bankruptcy reform legislation currently before the Congress and legislation before the states to open up credit counseling to “for-profit” organizations the American Association of Debt Management Organizations will hold a roundtable drafting session to develop industry performance standards.

(PRWEB) March 13, 2005 -- In the wake of denials and revocations of tax-exempt status to credit counseling agencies by the Internal Revenue Service (IRS), mandates for credit counseling in the bankruptcy reform legislation currently before the Congress and legislation before the states to open up credit counseling to “for-profit” organizations the American Association of Debt Management Organizations will hold a roundtable drafting session to develop industry performance standards.

Many of the criticisms of work performed on the elements of current industry standards surround the development as a process where there is neither prior public input nor real industry-wide consensus. This lack of transparency has caused many agencies to have no choice but to undergo costly, burdensome and redundant accreditation through numerous accrediting agencies all without any significant input or contribution to the substance of the standard.

Further, many elements of the standards used today discourage competition, stifle innovation and serve to limit the choices of the industry for service providers. The development of new standards will promote a better marketplace not restrain it.

There is widespread concern that current standards unnecessarily restrict the use of independent accreditation agencies, certification entities and other providers. A true industry-wide Roundtable with all interested parties, not just a handful working to control a limited segment of the market, can develop a standard that is fair, reasonable, not onerous, not unduly expensive and adequately protects consumers.

Therefore, the American Association of Debt Management Organizations (AADMO) has chosen to undertake the implementation of a process to develop a true industry-wide standard for best practices. AADMO believes that the shortcomings of the current standards have directed the marketplace to develop a new best practices standard to replace those that are in place today.

The first step in the process was an organizational meeting held in Orlando, FL in November 2004. This next step is the substantive drafting of actual language for the standard and discussion of the positions of the respective stakeholders.

AADMO will hold the Credit Counseling Industry Standards Council Roundtable drafting session in Washington, D.C. on March 21, 2005 at the Sheraton Pentagon South Hotel (Alexandria, VA - National Airport) from 9:00 AM - 5:00 PM.

This is an open meeting at no charge for all segments of the industry and all interested stakeholders. The Roundtable is open to credit counseling agencies, creditors, consumer groups, regulatory agencies, legislators and any other interested individuals or organizations.

About AADMO
AADMO is the credit counseling and debt management industry’s largest trade association. It is an industry education and advocacy organization whose mission is to promote and ensure the continued operation and viability of credit counseling and debt management organizations. AADMO provides its members and the consumer public with information about the credit and debt counseling industry. AADMO members are consumer credit counseling agencies debt management organizations, credit counselors, personal finance educators, credit and debt information educators, credit counselors, consumer lawyers and many others.

AADMO is the only trade association to have held state law compliance workshops with the New York State Banking Department and the California Department of Corporations upon enactment of their respective laws governing credit counseling and AADMO is the only trade association for the industry to publish a formal summary of state laws that has been reviewed by state regulators.

CONTACT INFORMATION
Mark Guimond
AADMO
http://www.aadmo.org/
540-548-1965

Imam's credit line detailed in court

A Commerce Bank vice president testified about a $100,000 line of credit - and two extensions of it.

By George Anastasia
Inquirer Staff Writer

May. 18, 2005 - Commerce Bank found itself on the other side of a corruption investigation yesterday when a bank official testified for the prosecution about a $100,000 line of credit granted in 1999 to a firm controlled by Imam Shamsud-din Ali.

John Finley, a vice president for lending in Commerce's Philadelphia office, took the stand in the racketeering trial of Ali, who is accused of, among other things, submitting phony records and false financial statements to get the line of credit extended in 2000 and 2001.

Ali's racketeering indictment grew out of the same federal pay-to-play City Hall corruption probe that resulted in the convictions last week of two other Commerce Bank officials and former City Treasurer Corey Kemp.

One of those convicted bankers also figured in the negotiations for the line of credit to Ali's Keystone Information & Financial Services, but as a victim, according to the government's theory of the case.

Finley said he and his then-supervisor, Stephen M. Umbrell, signed the agreement with Keystone in the summer of 1999. Umbrell and another Commerce official, Glenn K. Holck, were convicted last week along with Kemp and two others following a lengthy trial and 19 days of jury deliberation.

Finley, testifying as Ali's trial entered its fifth week, provided information about the negotiations that resulted in the original $100,000 line of credit and the two extensions that were approved by the bank.

The alleged defrauding of Commerce Bank is one of several financial schemes outlined in the racketeering indictment against Ali.

The imam is charged with heading a criminal enterprise that used bribery, extortion and fraud to generate illegal income for Keystone and for other institutions that he controlled, including his mosque and a school that he ran.

Ali, 67, is the central figure in what prosecutors called a "money-for-nothing" scheme that also included no-work contracts with the city and with a company doing business at Philadelphia International Airport.

Under cross-examination by Ali's attorney, James Binns, Finley acknowledged that the original line of credit was negotiated by Marcelino Guerrero, Ali's partner and onetime president of Keystone.

Finley described Keystone as a "start-up company" that was trying to get into the debt-collection business. He said he had had previous dealings with Guerrero when he worked for another bank and Guerrero was with a different collection company.

Binns, through his questions to Finley and through questions posed earlier in the trial, has implied that Guerrero depleted the line of credit, then quit Keystone, leaving Ali to deal with the debt.

Finley testified that Commerce is suing both men and Keystone in an attempt to collect the $100,000 debt.

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Contact staff writer George Anastasia at 856-779-3846 or ganastasia@phillynews.com.