Committee advances bill to curb predatory third‑party veterans claims practices, carves out federally accredited representatives

The House Standing Committee on Veterans, Military Affairs and Public Protection voted to advance House Bill 508, a measure designed to regulate private companies that assist veterans with Department of Veterans Affairs claims.

Representative Matthew Cook, the bill sponsor, told the committee HB508 "does no harm to any of these veteran service organizations" and described requirements that assisting organizations must notify veterans orally and in writing about available free services, prohibit initial or nonrefundable fees, cap fees tied to back pay, bar the use of international call centers and require reporting of compensation to the Kentucky Department of Veterans Affairs. Cook said the bill specifically excludes federally accredited agents and attorneys from its restrictions.

Supporters included John Blumstrom, a Marine Corps veteran who works in the veteran benefits assistance space, and Peter O'Rourke, president of the National Association for Veteran Rights, who argued the bill "strikes the right balance" by protecting veterans while preserving choice. Michael King, a retired Army sergeant major and accredited veterans service officer, said VSOs are often overwhelmed and that additional, regulated options can help veterans navigate complex claims.

Daryl Casey, legislative chairman of the Joint Executive Council of Veteran Organizations (JECVo), testified in opposition to the bill as written and urged an amendment to require VA accreditation for any nonprofit or for‑profit organization that assists, consults, prepares or files claims. Casey said JECVo represents "over 250,000 veterans in this state" and raised concerns that the bill’s fee rules could leave veterans liable for fees when large back‑pay amounts are split by formula; he also cited a federal judge's recent decision striking down a similar Louisiana law and mentioned ongoing Department of Justice whistleblower investigations and class actions against some pre‑filing firms.

Committee members asked technical questions, including whether third‑party vendors operate today and whether the bill would conflict with federal rules. Witnesses and the sponsor responded that the bill carves out federally accredited agents and attorneys to avoid the conflict noted in the Louisiana litigation and said they are urging Congress to develop an accreditation process. Representative Moore recorded a verbal explanation for a "yes" vote, describing the bill as a workable set of guardrails.

After roll call, Chair McCool announced HB508 passed the committee with a "favorable expression" and will proceed to the House floor.