Dear Senator, 

On behalf of Americans for Tax Reform (ATR) and our supporters across Ohio, I urge you to support Senate Bill 256 (SB 256) which would ensure responsible consumer debt relief is an option for Ohioans who are facing a serious challenges with their debt, aligning state law with longstanding federal consumer protection standards.

Since the Federal Trade Commission adopted its 2010 debt settlement rules, business models and compliance frameworks have evolved to reflect federal law. Because Ohio’s statute has not kept pace, debt service companies (DSCs) are unable to operate at scale in the state. 

As a result, many Ohioans struggling with unsecured debt lack access to a legitimate, regulated debt-settlement option, leaving them with fewer choices and, in some cases, bankruptcy as the only path forward.  

This is particularly unfortunate as Ohioans, like many other states’ residents, are seeing credit card bills rise – with average debt and delinquencies rising in the past year. In fact, the state ranks 5th-highest for increasing credit card delinquency rates (WalletHub). Individual bankruptcy filings increased 4% last year. Ohioans are in need of additional options to get out of debt. 

SB 256 would create a new regulatory framework so licensed debt relief companies can operate in the state and bring Ohio in line with federal rules and 28 states. 

SB 256 follows the proven “Three Part Test” from the FTC: debt settlement companies only receive their fees when the provider and creditor successfully negotiate a settlement, the consumer affirmatively agrees to that settlement, and the consumer successfully makes a payment to the creditor pursuant to the agreement. 

The bill implements further consumer safeguards to prevent bad actors from taking advantage of Ohioans in a vulnerable position. Consumers can get out of arrangements with short notice and without penalty. SB 256 also prohibits misleading marketing practices. 

With strong protections, SB 256 ensures that legal, proven, licensed debt relief programs are available to Ohioans, helping those who are struggling with debt to avoid bankruptcy. For these reasons, we urge you to support SB 256.

Sincerely, 

Grover Norquist

President

Americans for Tax Reform