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own in Cleveland and Columbus.

The most successful counseling services, the foundation has emphasized, are those with the broadest support. In the cities surveyed by The Star, the board of directors and advisory committee of each service covers the spectrum of the city's business and professional life.

All the bankers and finance company executives, the family service officials and labor leaders, the doctors lawyers and merchant chiefs share one common interest. They want to help debtors wake up from their financial nightmare and regain both their credit rating and their self-respect.

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A Maryland Senator and a Virginia Congressman yesterday announced plans to push for legislation to outlaw the commercial debt adjusters now preying on Washington area debtors.

At the same time, the business community moved forward with its plans to replace the commercial pro-raters with a nonprofit Consumer Credit Credit Counseling Service similar to services now aiding the debt-ridden in 63 communities across the country. The two-pronged move to improve both the debtors' and the city's economic health was the immediate response to The Star's "Debtor Beware" series of last week.

Plans to Offer Bill On the Senate side, Senator Joseph C. Tydings (D-Md.), chairman of the Senate District Committee's business and finance subcommittee, said he was shocked to learn of the practices taking advantage of those in need of financial counseling.

He said he will introduce legislation "to outlaw these deceptive practices." This will

be one of the measures included when he opens hearings soon on the need for consumer protection in a number of activities

here.

In the House, Representative Joel Broyhill (R-Va.) said The Star had pinpointed a problem which should have been corrected years ago "and which I attempted to do at the time through legislation."

Broyhill recalled that at earoutlaw commercial debt managlier hearings on legislation to ers, a "smoke screen was built up around the old argument of regulation versus prohibition and enough confusion was generated to prevent any positive action."

"We have now had enough time since the hearings," he said, "for evidence to be collected that protection of the public desperately requires outlawing rather than regulating the commercial debt adjusters."

Predicts Co-Sponsors

He predicted that there would be co-sponsors for the legislation because of the number of victims of the debt consolidators.

Recalling instances where he had personally counseled people who had got into financial jams, Broyhill also emphasized the need for a nonprofit, communidebt counseling ty-sponsored

service here.

"The lack of such a service in this area," he said, "is what leaves the door wide open for the unscrupulous to rob people in despair.'

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Both Tydings and Broyhill emphasized that the proposed legislation to outlaw the commercial debt poolers should specifically exempt nonprofit debt counseling services.

Meanwhile, District Commissioner Walter N. Tobriner

disclosed that the Commissioners have approved legislation to prohibit the commerical budget. planners and plan to send it to Capitol Hill soon.

As the Maryland and Virginia legislators emphasized, the Commissioners' measure will open the door to non-profit debt adjusting while slamming shut the door on the debt profiteers.

Strong endorsement for a nonprofit consumer counseling' service under community auspices came from Assistant Secretary of Labor Esther Peterson.

At the Labor Department, she pointed out, an experiment in such counseling is now under way. The two-phase program starts with a series of consumer education lectures which Labor's employes are given time off to attend. The second phase is the development and training of 30 consumer advisers who will be available to all department employes for advice and counseling.

Mrs. Peterson, who until recently was also the President's special adviser for consumer affairs, said she hoped that the Labor Department's program for its own employes will illustrate the value of counseling and consumer education not only for other departments but for the Washington area under community auspices.

Plans for establishing a free credit counseling service in the metropolitan area have been in

the talking stage here for the last year. Now, community action appears less remote.

Edward F. Garretson, secretary of the Retail Credit Association of Metropolitan Washington and vice president and general manager of Credit Bureau, Inc., heads the association's committee working on the counseling service in cooperation with the National Foundation for Consumer Credit, the Better Business Bureau, industry and civic leaders.

Garretson said support already has been offered by many national chains as well as local stores and financial institutions. The committee, he said, plans to contact all elements of the community for the key roles they are expected to play in the formation of the service.

Meeting Expected Soon

An organization meeting is expected as soon as sufficient support has been mobilized. The support, if it follows the pattern The Star found in other cities, will encompass educators, attorneys, family service officials, psychiatrists and other medical authorities, a representative of the military, and civic, labor and business leaders. In other cities, the business world is widely represented on both the board of directors and the advisory committee of the counseling service. Banks, stores, finance and loan companies usually foot the bills for the counseling service. They also provide considerable expertise in using credit wisely.

Until a nonprofit service is launched here, Garretson suggested that those who need credit advice should talk either to some of their own creditors or write an account of their particular problem to the Credit Bureau Inc., P.O. Box 1617, Washington 13, D.C.

The Writer

MIRIAM OTTENBERG

The author of "Debtor Beware" won a Pulitzer Prize in 1960 for a series exposing the used car racket in the Washington area.

As an investigative reporter for The Washington Star, she has uncovered crime and corruption on every level and campaigned successfully for new laws to correct old abuses.

Her stories have led to stronger enforcement tools against law breakers as well as pioneering laws in the fields of mental illness, sexual psychopathy, narcotics addiction and commitment of the criminally insane.

She was the first to reveal publicly that the Mafia still thrives in America as the Cosa Nostra. In the field of white collar crime, she has exposed the baby broker racket, phony marriage counselors, the wig racket and fake charities.

Her exposes of the used car and home improvement rackets as well as shoddy investment firms alerted the public to consumer pitfalls while triggering corrective legislation. Her series on the inadequacy of safety measures on many "pleasure" cruises was credited by maritime authorities with spurring "safety-at-sea" legislation.

Among her civic and journalistic honors are seven awards from the Washington Newspaper Guild, including two grand awards; testimonials from both her high school and her university, two citations for service to the armed forces and many others.

In an unprecedented tribute to a newspaper reporter, the law enforcement community and civic leaders gave a reception in her honor where she was presented with a plaque signed by the Attorney General of the United States, congressional leaders, judges, prosecutors and the chief of police.

Mr. SISK. We are happy to have with us the gentleman from Virginia, the author of H.R. 9806. The Chair is happy to recognize Mr. Broyhill for any statement he would like to make as I understand his services are needed in the Committee on Ways and Means.

STATEMENT OF HON. JOEL T. BROYHILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA

Mr. BROYHILL. Thank you, Mr. Chairman.

I have a prepared statement which I would like to submit for the record.

Mr. SISK. Without objection, the entire statement will be made a part of the record at this point.

(The statement follows:)

STATEMENT OF THE HONORABLE JOEL T. BROYHILL ON H.R. 9806 BEFORE SUBCOMMITTEE No. 5 OF THE HOUSE COMMITTEE ON THE DISTRICT OF COLUMBIA, THURSDAY, SEPTEMBER 14, 1967

Mr. Chairman: You are to be commended on holding hearings on the so-called debt-adjuster operations now proliferating in the District of Columbia. They are proliferating here because the District is one of the few jurisdictions left where the debt-adjuster can operate relatively unrestrained. The practice of so-called professional debt-adjusting or debt-pooling is generally a subterfuge to bilk the unwary; the shabby record nationally and locally proves this. The victims of the debt-adjuster are almost invariably those who are most vulnerable in our societythe untutored, the gullible and the poor.

It seems to me that the Committee is confronted at this point with three options concerning debt-adjusters: (1) ignore them-which we cannot-and which they'd love; (2) regulate them-which they would accept as a poor second to our first option; or (3) outlaw them. It is my earnest hope that the Committee will take the third option and completely ban professional debt-adjusters from the District because there is absolutely no valid economic or social justification for their existence.

H.R. 9806, which I sponsored, would completely outlaw-with certain exceptions the practice of debt-adjusting, debt-counseling, debt-pooling or whatever else it is called in the District.

This is not the first time I have sponsored legislation outlawing debt-adjusting in the District; I did so initially in the 85th Congress by introducing H.R. 573. However, the Committee at that time elected instead to regulate the practice fearing that an outright ban might be unconstitutional on the grounds that Congress could not outlaw a "legitimate" business. My feeling at that time was, and still is, that there is absolutely nothing legitimate about the practice of debt-adjusting as it is currently practiced. Stealing is not a "legitimate business". My opinion was verified on April 22, 1963, when the Supreme Court upheld the Kansas statute which outlawed the practice of debt-adjusting in that State. The Court's decision resulted from the case of Ferguson v. Skrupa, 372 U.S. 726. The Court found that the Kansas Legislature could, indeed, in the public interest ban such activities and that there was no constitutional bar to enacting such legislation. My bill, incidentally, is patterned after the Kansas statute.

What are debt-adjusters? Theoretically, the debt-adjuster operates by taking charge of a debtor's income and spreads it thin among his creditors charging him a small percentage of the amounts they pay on his bills, and leaving him a small living allowance.

That is the theory; but, in practice, it is just another detestable gimmick to gouge the public-especially those who in spite of their plight have every sincere intention of paying off their debts. The debt-adjuster has lured thousands of debtridden families into a scheme of paying off all their financial obligations. It's an incredibly vicious, parasitic racket. The adjuster takes a whopping fee and usually leaves his victim more hopelessly in debt than ever.

Who should seek the services of a debt-adjuster? The people who turn to debtadjusters are truly desperate. In most cases they are the poor, the untutored and the gullible. Generally they owe about $2,500 to $3,000 to small loan com

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