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

S_MD PASS-01 — Maryland provider market access and consumer fees

Maryland provides two distinct market-entry routes: registration for covered debt-settlement services and licensure for covered debt-management services. The activity, representations, and handling of consumer funds determine the applicable route. A nonprofit label, an attorney affiliation, or an out-of-state office does not establish an exemption. For licensed debt management, the verified consumer ceilings are $50 for the initial consultation, including the credit-report cost, and $8 per listed creditor per month, capped at $40 monthly. The debt-settlement statute specifies allocation methods and performance conditions but does not state a numeric percentage ceiling. Separate credit-services and federal telemarketing restrictions can impose additional payment conditions. [C002–C007, C013–C016, C021–C029] Financial Institutions, Section 12-1001+5

Research baseline: October 22, 2026, Pacific. Actual access/check date: October 23, 2026, Pacific, also October 23 UTC. Disposition: This completes the researched provider-access/consumer-fee component subject to the explicit holds below. It does not accept Maryland as a completed state investigation or imply A066 acceptance.

Throughout this answer, S001 means S_MD-P1-S001, and C001 means S_MD-P1-C001. The full identifiers appear in the evidence tables.

A. Substantive findings

1. Classification: the services and funds flow control

These distinctions come from the operative definitions and crossover provision, rather than a regulator’s abbreviated description of a product. A third-party, consumer-owned account also does not, by itself, prove that the provider “receives” funds: actual authority over deposits, transfers, and distributions must be examined. Financial Institutions, Section 12-1001+4

Consumer and business purposes differ across the statutes.

• DSS: The customer must be a Maryland-resident individual with “consumer debts” incorporated from CL §13-101. That definition includes debts primarily for personal, household, family, or agricultural purposes. An agricultural obligation is not automatically excluded as business debt.
• DMP: The definition requires a resident individual but does not contain the same express purpose restriction. A corporation is not that individual; an individual’s business-purpose debt should not be automatically excluded.
• CSB: Its own consumer and extension-of-credit definitions use personal, family, or household purposes. Do not import DSS’s agricultural wording into CSB.

DSS expressly reaches interstate and intrastate services through telephone, internet, and face-to-face channels. DMP licensing applies whether or not the provider maintains a Maryland office. CSB has express Maryland-resident and solicitation provisions that operate notwithstanding contractual choice-of-law or situs language. [C002–C003, C006, C010] Commercial Law, Section 13-101+4

2. Authorization, exclusions, and prohibited combinations

DSS: FI §12-1004 requires registration with the Commissioner of Financial Regulation, unless the statutory exclusion applies, before offering, providing, or attempting to provide covered services.

DMP: FI §12-906 requires a Commissioner-issued license unless exempt. Qualifying for-profit applicants have a statutory pathway. The former nonprofit-only restriction was removed by 2008 Chapter 606, effective June 1, 2008. Nonprofit evidence is now required in the application only “if applicable.” [C006, C011, C036] Financial Institutions, Section 12-1004+4

Exclusion matrix

An exclusion from one subtitle is not an exemption from every other applicable law.

[C005, C007–C008] The complete operative exclusion lists were read. Financial Institutions, Section 12-902+2

DMP eligibility is substantive. FI §§12-907–908 require fitness and financial responsibility, counselor training, GAAP net worth of at least $50,000 plus $10,000 per service location within the statutory framework permitting a requirement up to $500,000, audited financial information, insurance, a resident agent, a counselor-certification plan, the proposed agreement, and the required bond. Possessing a license does not replace §12-916’s transaction-specific education, analysis, suitability, ability-to-pay, agreement, and disclosure conditions. [C011–C012] Financial Institutions, Section 12-907+2

Some conduct remains prohibited despite DMP licensure. Section 12-920 prohibits a licensee from buying consumer debts, lending or extending credit, taking security interests, operating a collection agency, creating negative amortization, or charging for/providing credit insurance. It also restricts referral compensation and enrollment incentives. Those prohibitions cannot be converted into permission by obtaining an unrelated license. [C005, C020] Financial Institutions, Section 12-920

Separate CSB screening matters

CL §14-1901 defines extension of credit to include the right to defer an existing debt. In Commissioner v. Brown, Brown & Brown, the Court of Appeals applied that concept to paid mortgage renegotiation and enforced all three CSB attorney-exemption conditions. The court expressly did not decide whether employing a Maryland lawyer satisfied the first exemption prong for the firm/managing partner, because the regular-and-continuing-activity prong failed. That historical mortgage holding supports a screening inference for an unsecured installment workout; it does not establish that every DSS engagement is a CSB. [C009–C010] courts.state.md.us+2

CSB exclusions differ: they include an actual §501(c)(3) organization; authorized, actively engaged lenders; specified financial institutions; Maryland-licensed mortgage lenders; certain other regulated actors; and lawyers/CPAs acting within professional scope without regular and continuing CSB activity. The mortgage-lender clause here does not repeat DSS’s activity qualifier. CashCall rejects a broad rule that compensation must come directly from the consumer. [C009–C010] Commercial Law, Section 14-1901+2

3. Consumer fee structures, limits, refunds, and credits

The following permissions concern businesses subject to the respective statutes. They do not establish a fee schedule for an exempt attorney or institution.

[C013–C027] Financial Institutions, Section 12-918+4

Additional fee consequences: DMP agreements must disclose possible creditor compensation; that does not authorize consumer charges above §12-918. A licensee must correct its misdirected payments and reimburse actual creditor fees or charges caused by that misdirection. [C020] Financial Institutions, Section 12-917+2

No CPI calculation was used. The full fee provisions contain no consumer-fee indexing mechanism. No applicable adjustment notice changing the $50/$8/$40 figures or supplying a DSS numeric ceiling was located in the checked official materials. Annual regulatory assessments are provider obligations, not consumer-fee inflation adjustments. [C035, C038]

Interpretive holds: The literal DMP monthly provision says “listed” creditors, while the agreement must list both participating and expected-nonparticipating creditors. No controlling interpretation was located resolving expected nonparticipants or paid-off creditors. Examples therefore use active, participating, listed creditors. No general partial-month proration formula, mandatory hardship waiver, or universal ordinary-cancellation refund formula was established. Silence is not treated as permission to retain unearned fees. [C040]

4. When fees may be requested or received

Maryland requirements

DMP: Generally, the licensee cannot impose fees/charges or receive consumer or on-behalf funds before executing the DMP agreement, and can receive only amounts authorized by §12-918. The express exceptions concern qualifying standalone services under subsection (g)(3) and dishonored payments under subsection (i). Pre-service requirements in §12-916 also apply. [C012–C019]

DSS: Section 12-1010(c) prohibits charging the settlement fee until:

1. The provider and consumer have executed the DSS agreement.
2. At least one specified debt has been renegotiated, settled, reduced, or otherwise altered.
3. The consumer has made at least one payment in accordance with that agreement.

A compliant dedicated-account deposit is separately permitted under subsection (d). It is not automatically an earned provider fee. [C024–C026] Financial Institutions, Section 12-918+2

The state wording uses “at least one” and refers to the DSS agreement. I did not locate a controlling state-only interpretation resolving whether a particular account deposit could satisfy subsection (c)(3), or how that wording operates for acceleration of fees on still-unsettled debts. Those issues remain held; no advance-fee permission is inferred.

Independently applicable federal TSR baseline

For a transaction covered by the Telemarketing Sales Rule, 16 CFR §310.4(a)(5) prohibits requesting or receiving debt-relief consideration until the required debt alteration, consumer-executed valid agreement, and at least one payment under the consumer–creditor/debt-collector agreement occur. Individual settlements must comply with proportional or consistent savings-percentage allocation. FTC staff guidance explains that the required steps apply to the debt for which the fee is collected and that fees cannot be front-loaded.

The federal dedicated-account return deadline is seven business days; Maryland’s provision says seven days. The federal rule also covers qualifying DMP/credit-counseling arrangements. Coverage and exemptions require their own analysis; a Maryland fee ceiling does not authorize an advance fee under federal law. [C028–C029] ecfr.gov+3

5. Public market-entry procedure and verification

The actual OFR DMP, DSS, and conditional CSB industry pages were read, including their application instructions and links. They direct applicants to NMLS. DMP and CSB operational instructions use a principal-office license and disclosure of additional locations; the DMP statute itself requires accurate location/name information in NMLS. [C032–C033] Office of Financial Regulation+3

The application evidence establishes a current public route, with an important limit:

• The linked DMP, DSS, and CSB new-application PDFs redirected to a generic NMLS resource page with no readable checklist text.
• OFR’s public lookup instructions were read.
• The attempted NMLS Consumer Access destination failed in this public retrieval tool.
• No named provider’s current authorization was verified. A registration procedure, marketing statement, or historical order is not a current status determination.

[C033]

Provider payments to the state — separate from consumer fees

[C030–C031, C035] Financial Institutions, Section 12-904+3

DSS registrants establishing a qualifying dedicated account must file the $50,000 bond required by §12-1014. DMP applications require the §12-914 bond. Detailed bond mechanics remain for the later bond/funds pass. [C011] Financial Institutions, Section 12-1014+1

OFR’s October 20, 2026 advisory confirms the upcoming November 1–December 31 renewal period, use of NMLS status, and the need to submit a renewal request and clear outstanding items even where an automatic-renewal feature exists. This supports current operation of the system, not authorization of a particular business. [C034] Office of Financial Regulation

Historical reconciliation

• 2008 Chapter 606: removed DMP’s nonprofit-only restriction, effective June 1, 2008.
• 2016 Chapter 392: removed the DSS sunset before it would have operated; the relevant repeal took effect June 1, 2016.
• 2016 SB1132: proposed a 30% savings-fee ceiling and a changed attorney exclusion, but remained at first reading. Its proposed June 1 date is not an enacted effective date.
• 2010 Maryland study: the inspected 15%-of-savings discussion is under Illinois, not a current Maryland ceiling.
• OFR fee table updated October 24, 2016: shows superseded provider registration/license amounts. Current statute controls.
• July 2019 DSS transition FAQ: explains the move from the old $1,000/two-year system to $400 annual registration. Its then-stated NMLS fee is historical, not verified as the October 2026 amount.

[C036–C038] Chapter 606 (House Bill 947)+6

B. Source ledger

Access convention: Every entry below was checked on October 23, 2026, Pacific. “Read” means actual relevant body text or identified PDF pages were inspected, not merely a title or search snippet. Code sections are grouped under their article’s document ID. Maryland sources establish Maryland law or procedure; federal sources supply only the identified federal context.

Statutes, regulations, adoption records, and decisions

Operational materials, historical guidance, and failed retrievals

C. Claim ledger

“High—text” means the stated rule appears in the primary text, subject to the stated conditions and currentness check. “Conditional” identifies application requiring actual business-model facts. “Held” identifies an unresolved conclusion, not permission.

D. Worked examples and coverage/gaps

6. Bounded plain-text examples

Common assumptions: Dollars are USD. Required Maryland authority, valid agreements, disclosures, and service conditions are satisfied. Any separately applicable CSB timing restriction is either inapplicable on the actual facts or fully satisfied. DSS fee examples assume TSR coverage and its required creditor agreement/payment. Those assumptions are illustrative inputs, not findings about SettleADebt.com or a named provider. All arithmetic below is exact to cents; no rounding convention is needed.

Example 1 — DMP, lower debt and three creditors. [C012–C015]

Inputs: $900 total debt; three active, participating, listed creditors; $50 consultation; $12 credit-report cost; twelve authorized full months.

Operator: monthly ceiling = minimum of creditor count × $8 and $40.

Intermediate: 3 × $8 = $24; minimum($24, $40) = $24/month.

Result: 12 × $24 = $288 maintenance; $288 + $50 = $338 total provider fees. The $12 report cost comes out of the $50, leaving $38 of that consultation payment after the report expense. It is not an extra $12.

The $900 balance does not change the statutory fixed-dollar formula. Suitability and ability to pay must still be established. A further 10% × $900 = $90 success fee is not an authorized DMP fee pathway identified here.

Example 2 — DMP, previous fees and a proposed donation. [C014–C015]

Inputs: six active, participating, listed creditors; initial $50 consultation fully paid; $30 first-month maintenance already paid; proposed voluntary contribution $15.

Intermediate: 6 × $8 = $48; monthly ceiling = $40. Authorized consultation plus first-month total = $50 + $40 = $90. Already paid = $50 + $30 = $80.

Result: remaining capacity = $90 − $80 = $10. Accepting $15 would produce $95, exceeding the authorized aggregate by $5. Because the consultation allowance is fully used, this example does not depend on reallocating an unused consultation allowance.

Example 3 — DMP, creditor refusal and cancellation. [C017–C018]

Inputs: $400 paid specifically for debt reduction; $240 already disbursed; a creditor listed as participating declines; required notice is given; consumer rescinds under §12-918(h).

Operator: unexpended debt funds = paid debt funds − disbursed debt funds.

Result: $400 − $240 = $160 refund; rescission fee = $0. A previously earned $30 consultation fee is not automatically added by subsection(h)(4). Other grounds for refund remain separately examinable.

Example 4 — DSS proportional fee after only part of the program succeeds. [C021, C024, C028]

Inputs: enrollment debts of $1,000, $9,000, and $15,000; total $25,000. Disclosed total program fee $5,000—an assumed contract amount, not a statutory cap. Only the $1,000 debt has been validly settled and fully paid.

Operator: total fee × settled debt’s enrollment share.

Intermediate: $1,000 ÷ $25,000 = 0.04. $5,000 × 0.04 = $200.

Result: $200 allocated to that debt after the assumed earning conditions. If $80 was already lawfully collected against that earned fee, remaining amount = $200 − $80 = $120. The $80 is not assumed to have been a lawful advance fee. The remaining $4,800 is not earned merely because this first debt succeeded under the applicable TSR conditions.

Example 5 — DSS savings fee, later balance growth, and a smaller debt. [C022, C028]

Inputs: enrollment principal $4,000; later creditor balance $4,400; full settlement payment $2,600; disclosed uniform fee rate 25%, chosen only for illustration.

Intermediate: statutory enrollment savings base = $4,000 − $2,600 = $1,400. Fee = 0.25 × $1,400.

Result: $350, not $450 based on the later $4,400 balance.

Second debt: $1,000 enrollment principal, $800 full settlement payment. Savings = $200; same rate gives $50. At $1,000 enrollment and $1,000 settlement, the selected savings formula produces $0. An extra minimum charge was not established as a separate lawful pathway.

For an installment variant, the first installment alone must not be mistaken for the entire amount required to satisfy the debt. FTC guidance uses the full satisfaction amount; state-only accrual/refund consequences if the installment settlement later fails remain held.

Example 6 — DSS cancellation and avoiding double deduction. [C025–C026]

Inputs: current dedicated-account balance $1,220, including $20 interest, after creditor payments; earned but unpaid compliant fee $200; unearned future fees $1,800.

Operator: current balance − earned unpaid fee.

Result: $1,220 − $200 = $1,020 returned within Maryland’s seven-day period. The $1,800 future fee is not deducted. If the $200 was already paid and the current $1,220 balance is after that payment, return is $1,220, not $1,020.

Example 7 — six versus seven settlement payments. [C003–C004]

Inputs: provider periodically receives consumer funds; negotiates principal reduction; all other §12-1002(b) requirements are met.

Operator: test payments per debt against the statutory carveout.

Result with six payments: the payment-count condition is met. Result with seven: it is not met, so the provider cannot rely on that carveout to avoid DMP classification. Reclassify the actual funds activity and required authority. This does not establish that every seven-payment direct-pay settlement is prohibited. No fee entitlement is calculated from incomplete classification.

Example 8 — attorney connection, CSB overlap, and a fee hold. [C007, C009–C010, C027]

Inputs: a company retains a Maryland lawyer and sells recurring paid programs promising postponed due dates and settlement.

Operator: identify the actual service provider, test the DSS attorney–client/legal-service exclusion, then independently test CSB activity and its exclusions.

Intermediate: a lawyer’s involvement does not prove the company qualifies; represented debt deferral may raise CSB coverage; regular and continuing CSB activity can defeat the lawyer exclusion.

Result: fee entitlement held pending model-specific classification. No percentage is assigned from these facts.

Example 9 — state ceiling with an unsatisfied federal trigger. [C012–C013, C028–C029]

Inputs: licensed DMP provider; signed agreement; proposed $50 consultation charge; TSR applies; no qualifying creditor agreement/payment yet.

Operator: apply both state amount and federal timing rules.

Result: the state ceiling remains $50, but the amount presently requestable/receivable under the assumed TSR facts is $0. A ceiling is not advance-fee authorization.

7. Component coverage and exact next investigations

E. Researcher self-check

Actually read: the operative statutory definitions, full DMP and DSS fee sections, complete exclusion lists, relevant authorization/application provisions, current relevant regulations, the identified final-adoption notices, official 2026 affected-section tables, August enactments used for the currentness check, OFR operational pages, historical materials identified above, and the relevant holdings/passages of Brown and CashCall. Three parallel research threads supported this consolidated work; this is not an independent review.

Currentness discipline: the official 2026RS statute PDFs were treated as snapshots. The inaccessible “include enactments” routes for §§12-918 and12-1010 were not represented as read:

• https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gfi&section=12-918&enactments=true
• https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gfi&section=12-1010&enactments=true

Their substantive currentness was instead checked against the official amendment records. The failed Register route https://dsd.maryland.gov/MDRIssues/5202/Assembled.aspx was recovered through the official Archives PDF. These recovered gaps are distinct from the still-unread NMLS checklists.

Not read or not established: current NMLS checklist bodies; a live named-provider status record; every page of the 2010 comparative study; every collateral case; every historical proposal incorporated by reference in the adoption notices; or a complete citator treatment history. A bounded official-opinion search located no later reversal or supersession of the particular CSB holdings used here, but that is not a full citator review. No controlling decision directly resolving the identified DSS fee or DMP counting/proration edges was established.

Search snippets, provider marketing, association charts, older foundation cells, and inaccessible enforcement leads were not used as proof of current permission or fee limits. Proposed, repealed, historical, current, and unread materials are distinguished above.

Research used public-web retrieval in this conversation, without Deep Research, browser-control access, applications, contacts, purchases, account changes, or publication. The visible model-selector/UI setting was not independently verified, and no separate ChatGPT conversations were opened.

END S_MD PASS-01