Which place’s debt rules apply—and who can help?

S_AZ — PASS-01: Arizona provider market access and consumer fees

Research baseline and actual access: October 22, 2026, Pacific. The execution clock was October 23 UTC, which was still October 22 in California. This is the provider-access and consumer-fee component of the Arizona investigation.

Arizona provides a licensing pathway for covered debt-management businesses, including businesses that negotiate principal reductions. The decisive issue is receipt or substantial control of money intended for creditors. A company can fall within that regime even when a separate account administrator physically holds the money. Covered licensees face a $39 retainer ceiling and a monthly ceiling equal to the lesser of 0.75% of total indebtedness or $50, subject to the exclusions and payment conditions below. Those ceilings do not authorize collection before independently applicable federal requirements are satisfied. Definitions+2

Two material limitations remain: several DIFI application and public-lookup pages could not be opened, and the published statutes retain older June 30 language alongside the amended December 31 renewal provision. The substantive licensing and fee findings below rest on statutes, operative rules, enacted amendments, and the published Arizona appellate opinion—not those inaccessible webpages.

Identifier convention: In the discussion, S001 means S_AZ-P1-S001, and C001 means S_AZ-P1-C001. The registers contain the full identifiers.

A. Substantive findings

1. Classification: what conduct Arizona actually regulates

The statutory test

A.R.S. § 6-701(4) defines a debt-management company through these elements:

• A person or entity acts for compensation.
• It engages in receiving money, or evidences of money.
• Receipt occurs in Arizona or from an Arizona resident.
• It acts as the debtor’s agent.
• The purpose is distribution to the debtor’s creditors in full or partial payment of obligations.

The definition does not depend on calling the service “debt settlement,” “debt adjustment,” “credit counseling,” or a “DMP.” It also does not say compensation must come from the debtor; the nonprofit exclusions separately restrict debtor-paid compensation. [C001, C003, C005; S001, § 6-701(4)–(5)] Definitions

Constructive receipt: the controlling interpretation located

In JHass Group L.L.C. v. Arizona Department of Financial Institutions, the published Court of Appeals opinion held that a provider “receives” money when it exercises substantial control over client funds. The provider’s use of third-party accounts did not avoid licensing. The court also held that actual creditor distributions need not already have occurred: receipt or control for the purpose of distribution is sufficient. [C002; S013, ¶¶ 28–40, especially ¶¶ 34–36] azcourts.gov+2

The evidence included powers to schedule, modify, cancel, and refund disbursements, together with the way the accounts actually operated. A nominal customer right to cancel transfers did not defeat the finding of substantial control. The opinion expressly did not decide the precise meaning of “evidences thereof.” It resolved coverage under “receiving money.” [C002; S013, ¶¶ 38–40 and footnote 3] azcourts.gov+2

Model-by-model classification

[C001–C006, C011–C012, C018; S001, §§ 6-701, 6-703, 6-709(H), 6-710(7), 6-715; S013, ¶¶ 28–40.] Definitions+4

Consumer versus business debt. Chapter 6’s definition does not expressly limit coverage to personal, family, or household debt, or exclusively to unsecured debt. Its “debtor” is a person; Arizona’s general definition of person includes business entities. Accordingly, business-purpose debt is not a verified categorical exemption. This is a textual conclusion; this pass did not locate a controlling decision adjudicating every commercial-debt application. [C005; S001, § 6-701(4)–(5); S002, § 1-215(29)] Definitions+1

Remote providers. The express “from a resident of this state” language reaches beyond an Arizona office location. An out-of-state provider cannot establish exclusion merely by locating its office or account administrator elsewhere. Actual residency, receipt/control, agency relationships, and exemption facts still matter. [C005; S001, § 6-701(4); S013, ¶¶ 34–36.]

2. Market access: license required, prohibited conduct, and conditional exclusions

Covered businesses have an actual licensing pathway

Sections 6-703 and 6-715 prohibit engaging in covered debt-management business without the required license. Section 6-707 affirmatively provides for issuance after application, fees, bond approval, and the deputy director’s investigation. The relevant official is the deputy director of DIFI’s Financial Institutions Division, as defined in § 6-101.

This establishes a licensing regime for covered compensated businesses. It does not establish a blanket prohibition on for-profit debt management, and it does not authorize an unlicensed covered business to operate while an application is pending. [C006, C030; S001, §§ 6-101(5)–(6), 6-703–707, 6-715.] Definitions+3

Section 6-702 exclusions must be tested separately

[C007–C010; S001, §§ 6-701(8), 6-702, and the Title 6 chapter/article headings.] Exemptions+3

The bill-paying exclusion requires that the provider:

1. Not accept bills on invoices contractually past due at the time of receipt by the debtor.
2. Not initiate creditor contact to compromise debt or arrange a new payment schedule.
3. Not provide debt counseling.
4. Make a written contract and immediately furnish the completed copy.
5. Provide monthly written statements and requested verbal accountings during normal business hours.
6. Not take physical possession of debtor money except agreed service fees and charges.

Limited check-signing authority is permitted only where the account remains solely in the debtor’s name, the debtor controls deposited money, and authority is limited to debtor-approved obligations. This specific exclusion cannot be assumed for a settlement or counseling service. [C010; S001, § 6-702(9)(a)–(f).]

Consequences for fees under exclusions. The two nonprofit exclusions require zero debtor compensation, direct or indirect. For genuinely excluded attorneys, institutions, and other actors, this pass does not establish a substitute numerical fee ceiling under their separate governing regimes. Chapter 6 exclusion should not be presented as unlimited-fee permission. [C007–C010.]

Referral compensation matters to SettleADebt.com. Section 6-710(7) makes it unlawful for a licensee to pay consideration for referral of a debtor to its business, or receive consideration for referring a debtor to another person for any reason. A proposed paid-lead arrangement involving a licensed Arizona debt-management company therefore requires examination under this prohibition. [C012; S001, § 6-710(7).] Prohibitions

3. Consumer-fee structures, bases, limits, and adjustments

Covered Chapter 6 licensees

[C013–C019; S001, § 6-709(B)–(H).] Requirements

A licensee also cannot take a promissory note or other promise to pay as its fee, or accept a mortgage or other security for its fee. [C021; S001, § 6-710(6).]

These are fixed statutory amounts, not CPI-adjusted amounts

The same $39 retainer and 0.75%/$50 monthly limits appear in the actual enacted text of Laws 2021, chapter 356, § 166. The operative Article 6 rules contain no separate inflation-adjustment mechanism for those ceilings. Section 6-709(D)’s annual recalculation concerns the debtor’s debt balance, not inflation. [C034; S001, § 6-709(C)–(D); S003; S011, § 166.] H Ver of SB1463

The Legislature’s online compilation warns that it reflects law effective January 1 after the latest session. I therefore checked the actual 2025 and 2026 tables of sections affected and the published delayed-effective list. They show no 2025–2026 amendment to the relevant definition, exemption, or consumer-fee provisions, and no listed future-effective change to those provisions. The tables’ stated coverage is preserved in the source register. [C034; S008–S010.] azleg.gov+3

Adjacent credit-services law

A provider may separately become a credit services organization under A.R.S. § 44-1701 by offering, for consideration and with respect to credit extended by others, credit-record improvement, obtaining credit, or advice about either. Its buyer is a natural person, and the defined extension of credit concerns personal, family, or household purposes. Pure debt settlement is not expressly named. Whether a particular concession or new payment arrangement also constitutes obtaining credit remains a model-specific issue. [C026; S014, § 44-1701.] Definitions

For covered, nonexempt CSOs:

• Section 44-1703(1) prohibits charging or receiving compensation before full and complete performance, unless the organization satisfies the specified state surety-bond exception.
• The bond must be issued by an authorized surety, with a copy filed with the Corporation Commission. Section 44-1708(C) sets it at 5% of fees under contracts entered during the preceding 12 months, with a $5,000 floor and $25,000 ceiling, adjusted annually by the stated fiscal-year deadline. These are bond amounts, not consumer-fee ceilings.
• No numerical consumer-fee ceiling was found in the twelve reviewed sections of this article.
• The prescribed cancellation right runs through midnight of the third day after the transaction; payments must be returned within 15 days after receipt of cancellation notice.
• Total payments and service/refund terms must be disclosed as specified in §§ 44-1704–1706.

[C027–C028; S014, §§ 44-1703–1706, 44-1708.] azleg.gov+4

The CSO exclusions differ from Chapter 6. For example, § 44-1702 expressly excludes qualifying § 501(c)(3) organizations and Arizona-licensed attorneys acting within their practice. Those exclusions do not automatically satisfy § 6-702. [C026; S014, § 44-1702.]

The state bond exception is not federal advance-fee authorization. Section 44-1712 preserves other applicable law. Covered telemarketed credit repair has the separate timing restriction in 16 C.F.R. § 310.4(a)(2); CROA also prohibits advance compensation where its definition applies. Exact CROA text was recovered in the official 2024 Code, with the central prohibition corroborated by the FTC’s currently accessible summary; current OLRC section access failed. No bonded advance-fee credit-repair model is cleared here. [C029; S014, § 44-1712; S016, § 310.4(a)(2); S019–S020.] azleg.gov+3

4. When fees may actually be requested or received

Arizona conditions

A Chapter 6 licensee has no entitlement to any fee until it has notified every creditor listed in the application of the debt-management contract. Agreeing to a price in advance under § 6-709(C) does not eliminate that prerequisite. [C017; S001, § 6-709(E).]

Monthly fees become due when deposited funds are remitted to creditors. The separate rule ordinarily requiring remittance within seven days allows longer holding when reasonably necessary to accumulate a sum for payment; that exception does not itself make a monthly service fee payable while funds remain undistributed. [C014, C020; S001, § 6-709(C)(2), (F).]

Before accepting the account, the licensee must have a reasonable written budget analysis supporting the debtor’s ability to pay the agreed creditor payments and service charges. The operative budget rule requires a signed, dated analysis and consideration of reasonable necessary living expenses. [C020; S001, § 6-710(1); S003, R20-4-607.] Requirements+1

Section 6-709(E) is phrased as fee entitlement. The federal rule below expressly addresses requesting or receiving payment. Those are distinct texts.

Independent federal TSR context

Where the Telemarketing Sales Rule applies, § 310.4(a)(5)(i) prohibits requesting or receiving debt-relief compensation until:

1. At least one debt has been renegotiated, settled, reduced, or otherwise altered under a valid agreement executed by the customer.
2. The customer has made at least one payment under that agreement.
3. For debts resolved individually, the fee satisfies the required allocation method.

Enrollment, accumulation of settlement savings, and a negotiated offer alone do not establish all these conditions. [C023; S016, § 310.4(a)(5)(i).] ecfr.gov

The permitted individual-debt allocation methods are:

• Proportional allocation: total program fee × individual debt at enrollment ÷ total enrolled debt.
• Savings allocation: the same percentage for each debt × the difference between its enrollment amount and the amount actually paid to satisfy it.

These federal formulas do not establish an Arizona fee ceiling or approve a fee exceeding Arizona’s applicable limits. [C024; S016, § 310.4(a)(5)(i)(C).]

For a DMP, the FTC’s original final-rule explanation requires altered terms, customer execution, a plan binding applicable creditors, and evidence of the customer’s first payment to the counseling agency for distribution. Arizona’s separate monthly-fee remittance requirement still applies. [C023; S017, 75 Fed. Reg. 48489–48490, § III.C.5.a.] federalregister.gov

Coverage is not assumed from the service label. The federal debt-relief definition covers represented changes to unsecured debts, including principal, interest, and fees. Telemarketing has its own interstate-call definition. Inbound calls responding to debt-relief advertising or direct-mail solicitation do not obtain the ordinary advertising exemptions. Genuine unsolicited calls, qualifying face-to-face transactions, qualifying business-to-business calls, and entity jurisdiction require their own analysis. Attorney participation is not a general TSR exemption. [C022; S016, §§ 310.2(o), (ii), 310.6(b)(3)–(7); S018, attorney/nonprofit discussions.] ecfr.gov+4

A required dedicated account must satisfy all conditions in § 310.4(a)(5)(ii), including consumer ownership, an insured institution, an unaffiliated administrator, and no prohibited referral compensation. On withdrawal, the customer must receive account funds other than properly earned fees within seven business days of the request. Federal compliance with this account provision does not resolve Arizona’s substantial-control test. [C025; S016, § 310.4(a)(5)(ii); S013.]

5. Public market access: verified legal procedure and operational limits

Actual application requirements were read

Section 6-704 and current R20-4-602 establish an application containing the prescribed identity and business information, organizational documents, financial statements, sample consumer contract, statutory bond, background checks, and any required credit report or fidelity bond. Branches and agencies require their own applications. Issuance follows the deputy director’s statutory investigation; a license is nontransferable. [C030; S001, §§ 6-704–707; S003, R20-4-602.] Application for license; bonds; contract+3

The statute’s debt-management bond schedule starts at $5,000 for annual disbursements below $100,000 and rises through the stated tiers to $25,000 above $1 million. Section 6-709(A) and R20-4-612 also require the prescribed $2,500 liquid-asset excess. These are minimum access conditions discussed here; the full bond, solvency, funds, and remedies investigation remains open.

Provider fees are separate from consumer fees

[C031; S001, §§ 6-126(A)(14), (17), (B), (D)(2), 6-706, 6-708(A).] azleg.gov+2

Renewal-date reconciliation

• Laws 2025, chapter 222, § 2 changed § 6-707(C) to December 31 expiration and renewal.
• Section 17 extended specified active 2025 licenses and made the listed amendments apply retroactively from after December 31, 2024.
• The 2025 general effective date was September 26, 2025.
• The final amendment to R20-4-602(C) expressly took effect February 9, 2026, changing the rule to December 31.
• The Code’s historical note prints February 9, 2025; the actual final notice states 2026.
• Section 6-706(B) still says a licensee may obtain renewal without investigation by payment on or before June 30. I have not converted that permissive wording into a separate mandatory deadline, or treated it as silently repealed. An authoritative reconciliation of that residual provision remains outstanding.

[C032–C033; S001, §§ 6-706–707; S005–S007.] Fees+4

The annual operating report remains due August 15 for the preceding July–June period under § 6-709(M) and R20-4-603. The renewal change did not itself change that reporting period. [C033.]

What operational verification could not establish

Actual opens of DIFI’s financial-enterprises licensing page, application PDF, historical supplement, FAQ, and license-search page returned 403. The identified NMLS company-checklist URL redirected to a generic resource-center page with no readable checklist. The attempted Thentia root returned 405, and NMLS Consumer Access returned 404 through this research tool.

Consequently:

• The legal existence and requirements of the licensing pathway are established.
• The currently functioning application interface and full operational checklist are only partially verified.
• No named provider’s current Arizona authorization was verified.
• Indexed excerpts mentioning “debt negotiation” or displaying fee tables are discovery evidence only.
• A historical indexed checklist’s $800 application amount and old June-cycle proration table do not override the opened statutory $500 application fee and later renewal amendments.

[C035; S021–S028.]

For the adjacent CSO bond filing, an actual Arizona Commerce Authority page was readable. It directs filing a bond copy with the Corporation Commission’s Corporation Division Records Section and states no filing fee. That filing is not issuance of a Chapter 6 debt-management license. [C027; S015.] azcommerce.com

6–7. Worked boundaries and component disposition

Section D supplies the requested calculations and the complete coverage/gap table. Those examples apply the verified rules and expressly hold any fee or model whose legal prerequisites have not been established.

B. Source register

Read-status key: R = actual primary passages opened and read; D/F = discovered, but substantive opening failed or redirected. Every entry below was checked October 22, 2026, Pacific. A webpage’s crawl/update date is not treated as a legal effective date.

B1. Read authorities

S001 section URL map — one statutory-document identity reused

S014 section URL map — one statutory-document identity reused

B2. Discovery and failed-access register

These entries support the stated access limitations, not substantive permission or current fee claims.

C. Claim register

Confidence key: High means the identified primary text directly supports the proposition. Conditional means application depends on stated facts or an expressly identified inference. Held means the evidence does not establish the proposed operational or legal conclusion. Currentness is bounded by the source-register versions, not a representation of exhaustive legal clearance.

D. Worked examples and coverage/gap table

Worked examples

These examples use assumed facts, not private borrower information. Dollar calculations are in USD. Exact-cent inputs were selected so no statutory rounding convention needs to be invented. Where a calculation could produce fractional cents, this pass establishes no authority to round upward beyond the ceiling.

Example 1 — Lower debt produces a lower monthly ceiling

Plain text

Inputs: eligible total indebtedness = $1,000.00.
Base: $1,000.00.
Operator: 0.75% = 0.0075; then take the lesser of that result and $50.
Intermediate: $1,000.00 × 0.0075 = $7.50.
Result: monthly ceiling = $7.50.
Rounding: none; exact cents.

Assume an authorized licensee, a contract allowing this charge, all required creditor notices, and an actual creditor remittance. Any applicable TSR conditions must also be satisfied. A $50 monthly charge would exceed this state ceiling by $42.50. [C013–C017, C023.]

Example 2 — Housing excluded; prior monthly charge credited against the ceiling

Plain text

Inputs: eligible debts = $6,000; residential mortgage = $120,000;
rent obligation = $1,800; already charged this month = $30.
Base: $6,000; mortgage and rent are excluded.
Operator: min($6,000 × 0.0075, $50).
Intermediate: min($45, $50) = $45.
Remaining monthly room: $45 − $30 = $15.
Result: at most $15 additional monthly service charge.
Rounding: none.

This assumes the same applicable monthly base and satisfaction of all entitlement/timing conditions. Three creditors do not create three separate $45 allowances. [C014–C015.]

Example 3 — Annual recalculation reduces the charge

Plain text

Earlier eligible debt: $10,000.
Earlier calculation: $10,000 × 0.0075 = $75; capped at $50/month.

Recalculated eligible debt: $4,000.
New calculation: $4,000 × 0.0075 = $30.
Result: new monthly ceiling = $30.
Difference: $50 − $30 = $20 less per month.
Rounding: none.

The recalculation must occur at least annually; this is not an inflation adjustment. Continued use of the old $10,000 balance after the required recalculation would not satisfy § 6-709(D). [C014–C015, C034.]

Example 4 — Partial settlement and an unsupported savings fee

Plain text

Inputs: one debt = $2,000; actual amount paid to satisfy it = $1,100.
Savings: $2,000 − $1,100 = $900.
Proposed fee: 25% of savings.
Proposed-fee arithmetic: $900 × 0.25 = $225.

Other eligible debt after settlement/recalculation: $3,000.
Monthly-cap arithmetic: $3,000 × 0.0075 = $22.50.
Result: applicable monthly ceiling on that recalculated base = $22.50.
Rounding: none.

For a covered Chapter 6 licensee, the $225 savings calculation establishes no separate authorized fee. The debtor must receive the full compromise benefit, and lawful service charges remain subject to the statutory structure. A retainer already charged under the same contract does not become a new per-settlement retainer merely because another debt is resolved. [C013–C015, C018, C024.]

Example 5 — Missing notice or missing remittance

Plain text

Inputs: proposed retainer = $39; proposed monthly fee = $50.
Case A: one listed creditor has not received contract notice.
State fee entitlement at that point: $0.

Case B: all notices given, but funds are only accumulating;
no creditor remittance has occurred.
Monthly charge currently due under the remittance condition: $0.
Rounding: not applicable.

A reasonable accumulation period can affect remittance timing, but does not itself trigger the monthly fee. If the TSR applies and the executed-agreement/first-payment requirements are unmet, the currently requestable or receivable debt-relief fee is also $0 under that federal provision. [C014, C017, C020, C023.]

Example 6 — Approved expense versus routine add-on

Plain text

Inputs: actual unusual, necessary expense = $12;
advance written debtor approval = yes;
advance written deputy-director approval = yes.
Expense amount examined: $12.
Result: $12 falls within the stated state expense pathway,
subject to the other applicable legal conditions.

Change one input: deputy-director advance approval = no.
Result: no charge established under this exception.

The expense exception does not establish a recurring $12 “administration fee.” Nor does state approval override an applicable federal prohibition on early debt-relief compensation. [C016, C023.]

Example 7 — Cancellation and an unearned dedicated-account balance

Plain text

Inputs: dedicated-account balance = $400;
provider fees properly earned under applicable law = $0.
Operator: account funds − properly earned fees.
Calculation: $400 − $0 = $400.
Result: $400 returned within seven business days of the request,
if the TSR dedicated-account provision applies.
Rounding: none.

Separately, the state contract must allow termination without penalty on five-day notice. A previously lawful, earned $39 retainer falls within the state debtor-termination retention exception; an unearned charge does not become earned merely because the contract calls it a retainer. [C019, C025.]

Example 8 — Federal proportional allocation does not approve an Arizona fee

Plain text

Assumed total program fee for federal arithmetic only: $2,000.
Enrollment debts: $2,500 and $7,500; total = $10,000.
Resolved debt: $2,500, with executed agreement and required payment.

Allocation ratio: $2,500 ÷ $10,000 = 0.25.
Allocated federal fee: $2,000 × 0.25 = $500.
If $150 was already lawfully collected against that allocation:
remaining allocation = $500 − $150 = $350.
Rounding: none.

Disposition: Arizona collection permission is held. This example does not assume that the $2,000 program fee is lawful under Arizona law. If the provider is a Chapter 6 licensee, the federal $500 allocation cannot displace Arizona’s fee structure and timing. No allocation for the unresolved $7,500 debt is earned merely because the first debt was resolved. [C014, C018, C023–C024.]

Example 9 — Nonprofit and account-control boundaries

Plain text

Nonprofit inputs: otherwise qualifying organization;
debtor payment characterized as compensation = $5.
Condition comparison: $5 compensation is greater than the permitted
zero debtor compensation under the identified nonprofit exclusion.
Result: that exclusion is unavailable on these assumed facts.
No replacement license or fee permission is inferred.

Account-control inputs: $10,000 held by a third party;
provider can schedule/change/cancel creditor disbursements.
Result: physical receipt = not established;
substantial-control coverage = requires JHass analysis.
No unlicensed fee scenario is approved.

Calling compensation a donation does not establish the exemption. Conversely, a genuinely gratuitous payment requires examination of its actual character; this example assumes it is compensation. [C002, C008.]

Example 10 — CSO timely cancellation

Plain text

Inputs: covered, nonexempt CSO; payment already made = $120;
timely statutory cancellation received.
Cancellation penalty: $0.
Refund calculation: $120 − $0 = $120.
Result: $120 returned within 15 days after receipt of cancellation notice.
Rounding: none.

This demonstrates the refund obligation without validating how the original $120 was collected. The state bond exception and all applicable federal restrictions must be examined separately. [C027–C029.]

Component coverage and exact next investigations

E. Researcher selfcheck

• Actual primary reading: Arizona’s operative debt-management statutory provisions; the active Article 6 rules; relevant 2023 and 2026 final-adoption material; the 2025 renewal enactment; 2025–2026 affected-section tables; the delayed-effective list; the published JHass opinion’s relevant analysis; Arizona’s CSO article; current eCFR debt-relief provisions; and the identified federal explanatory material.
• Actual visual inspection: Relevant Code pages and final-adoption pages were inspected to resolve the renewal-rule date discrepancy.
• Current versus historical: The 2021 act was used as enacted historical corroboration. The 2025 renewal change and 2026 final rule were identified by their legal dates. The 2010 FTC guide was treated as dated, nonbinding guidance. The recovered CROA edition was identified as 2024.
• Discovery versus read: Blocked DIFI pages, inaccessible NMLS instructions, and current OLRC failures were not upgraded into substantive verified authority. Search excerpts did not establish provider authorization.
• Limits retained: No particular noncustodial workflow, nonprofit, attorney arrangement, paid-lead contract, provider license status, or consumer fee ledger was cleared. No complete subsequent-history check or comprehensive statewide case-law search is claimed.
• Method: Ordinary web research was used in this conversation. No Deep Research was invoked, and no change or verification of the ChatGPT UI model tier is claimed.
• Actions: No application, contact, purchase, account change, additional user chat, site change, or publication was performed. No local deliverable or publication-readiness claim is made.
• Review status: This is a researcher selfcheck, not an independent review. Arizona statewide acceptance and A066 acceptance are not granted or implied.

END S_AZ PASS-01.