Consumer advocates and legal experts warn HB 534 would remove fee caps and expose Ohioans to higher costs
March 18, 2026 | Financial Institutions, House of Representatives, Committees, Legislative, Ohio
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Several witnesses urged rejection of House Bill 534, arguing the bill would remove a state cap on fees charged by debt-settlement companies and increase risks for financially vulnerable Ohioans.
Mark Dan, introduced to the committee as representing the National Association of Consumer Bankruptcy Attorneys, said HB 534 would eliminate Ohio’s current fee cap (8.5% of any debt settled) and replace it with a regime that lacks a ceiling on fees. “Eliminating the fee cap would hurt both borrowers and lenders because it would decrease the money available for settlement, increase the time it takes to save enough to begin negotiations, and reduce the chances of settlement at all,” Dan said, adding that his office has brought multiple lawsuits on related issues.
Dan and other opponents said debt-settlement companies have a history of deceptive practices, sometimes encouraging consumers to stop paying creditors and later failing to settle debts while collecting fees, leaving consumers exposed to lawsuits and judgments. They urged the committee to preserve consumer protections, including the existing fee cap and state enforcement authority.
Witnesses from nonprofit credit counseling (Todd Moore of Trinity Credit Counseling) also opposed HB 534 and suggested alternatives: stricter fee limits tied to performance, improved disclosure, and stronger oversight rather than complete repeal of the fee cap. Moore recommended reviewing fee models used in other states and federal consumer-counseling limits and urged the committee to consider reforms that balance options for consumers with guardrails against excessive fees.
Committee members questioned whether bankruptcy or nonprofit counseling could be better alternatives for some consumers and pressed opponents on whether improved transparency and fee caps could produce a workable middle ground. Opponents stressed the benefit of state-level caps and enforcement by the attorney general’s office rather than moving oversight to an under-resourced commerce agency.
The committee concluded the third hearing and adjourned without taking a vote.
Mark Dan, introduced to the committee as representing the National Association of Consumer Bankruptcy Attorneys, said HB 534 would eliminate Ohio’s current fee cap (8.5% of any debt settled) and replace it with a regime that lacks a ceiling on fees. “Eliminating the fee cap would hurt both borrowers and lenders because it would decrease the money available for settlement, increase the time it takes to save enough to begin negotiations, and reduce the chances of settlement at all,” Dan said, adding that his office has brought multiple lawsuits on related issues.
Dan and other opponents said debt-settlement companies have a history of deceptive practices, sometimes encouraging consumers to stop paying creditors and later failing to settle debts while collecting fees, leaving consumers exposed to lawsuits and judgments. They urged the committee to preserve consumer protections, including the existing fee cap and state enforcement authority.
Witnesses from nonprofit credit counseling (Todd Moore of Trinity Credit Counseling) also opposed HB 534 and suggested alternatives: stricter fee limits tied to performance, improved disclosure, and stronger oversight rather than complete repeal of the fee cap. Moore recommended reviewing fee models used in other states and federal consumer-counseling limits and urged the committee to consider reforms that balance options for consumers with guardrails against excessive fees.
Committee members questioned whether bankruptcy or nonprofit counseling could be better alternatives for some consumers and pressed opponents on whether improved transparency and fee caps could produce a workable middle ground. Opponents stressed the benefit of state-level caps and enforcement by the attorney general’s office rather than moving oversight to an under-resourced commerce agency.
The committee concluded the third hearing and adjourned without taking a vote.
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