Opinion ID: 2823810
Heading Depth: 2
Heading Rank: 1

Heading: The DMSA

Text: Â¶15Â Â Â Â Â In 2007, the General Assembly enacted the DMSA to regulate companies that offer and provide debt-management services to Colorado residents and to protect those consumers from unscrupulous debt-management providers; it became effective on January 1, 2008 and was amended in 2011 and 2013. See Â§Â§ 12-14.5-201 to -242. The DMSA was modeled after the Uniform Debt-Management Services Act (âUDMSAâ),which the National Conference of Commissioners on Uniform State Laws issued in July 2005. 1 The DMSA contains a comprehensive regulatory scheme that requires those who provide (or offer or agree to provide) debt-management services, directly or through others, to apply for registration with the Administrator and, if approved, to comply with detailed requirements. See generally Â§Â§ 12-14.5-201 to -242. Â¶16Â Â Â Â Â To apply, a prospective provider must pay a fee, file a surety bond, identify its trust account and sign an irrevocable consent form authorizing the Administrator to review the account, and submit documentation proving it complies with Coloradoâs statutory business requirements. Â§ 12-14.5-205. The application must include detailed information on topics such as the applicantâs business names, the jurisdictions in which its officers and directors are licensed or registered to provide debt-management services and in which its clients reside, any litigation or enforcement actions pending against the applicant, and any ownership interests in related entities. Â§ 12-14.5-206. The application must also include documents such as audited financial statements, client education program materials, client agreements, a schedule of fees and charges, the results of a criminal records check for all employees or agents with access to the trust account, and compensation statements for the applicantâs five most highly compensated employees for the past three years. Id. Much of this information becomes available to the public. See Â§ 12-14.5-208. Â¶17Â Â Â Â Â The Administrator has discretion to issue or deny registration. Â§ 12-14.5-209. If the application is approved, the provider is subject to extensive regulation that controls most aspects of the debt-management services relationship. For instance, the provider must give specific disclosures to a potential client before performing any services. See,Â e.g., Â§Â§ 12-14.5-217 to -218. Agreements with consumers must satisfy detailed requirements. See Â§Â§ 12-14.5-219 to -220. Trust accounts, the fees that a provider may charge, and the circumstances under which a provider can terminate an agreement are also subject to regulation. See Â§Â§ 12-14.5-222 to -226. Â¶18Â Â Â Â Â The Administrator maintains regulatory oversight, including the right to examine accounts and books. Â§ 12-14.5-232. The Administrator can enforce compliance with the DMSA by ordering the violators to cease and desist, prosecuting a civil action, and recovering restitution or civil penalties. Â§ 12-14.5-233. The Administrator can also suspend, revoke, or refuse to renew a providerâs registration. Â§ 12-14.5-234. Â¶19Â Â Â Â Â The DMSA defines âdebt-management servicesâ to mean âservices as an intermediary between an individual and one or more creditors of the individual for the purpose of obtaining concessions.â Â§ 12-14.5-202(10)(A). However, it specifically excludes some legal, accounting, and representative services from this definition. See Â§ 12-14.5-202(10)(A)(i)â(iii). This case centers on the legal services exemption, the terms of which have evolved since the DMSAâs inception.