National Foundation For Consumer Credit (NFCC)

The National Foundation for Consumer Credit (NFCC) is a franchise organization of non-profit credit counseling agencies. One of the primary services provided by NFCC member agencies is counseling people who have taken on too much debt, with the goal of keeping them from declaring bankruptcy.

Another way they assist is by helping consumers work out payment plans and reduce their overall debt load. The NFCC also lobbies Congress and regulatory agencies on issues of importance to the credit counseling industry.

​​​​​​​The NFCC was founded in 1951 and has grown to represent local accredited member agencies in all 50 states, the District of Columbia and Puerto Rico. The NFCC acts as a gatekeeper, vetting its member agencies to ensure consumers receive consistent and competent advice. For example, member agencies must conduct annual audits of operating and trust accounts. They must offer consumer education programs. Further, members must follow strict rules on disbursing the client’s payments to creditors twice a month. Also, debt counselors themselves must be trained and accredited by the NFCC.

Besides general debt counseling and consolidation services, NFCC programs offer: 

• Credit score reviews
• Counsel homeowners on strategies to avoid foreclosure
• Help senior citizens decide whether to purchase a reverse mortgage
• Initiatives to manage student loan debt advise graduates on how to minimize interest payments
• Counsel clients how to ensure timely repayment of debts
• Explain what to do if they cannot make payments

The field of credit counseling has come under fire from consumer watchdog organizations. Beyond actual scammers who take a customer’s money and do not pass it along to debtors, some credit counseling agencies do not make it clear that while they are a non-profit agency, their services are not free. 

Consumers must generally pay a fee to agencies for debt relief or consolidation services. Consumer watchdogs point out that in many cases a consumer may arrange debt relief themselves by making a simple phone call to the creditor. As such, a primary goal of the NFCC is to burnish the reputation and competence of its member agencies.

Banks and credit card issuers have been proponents of the counseling services offered by organizations such as the NFCC because they reduce the odds of a debtor declaring bankruptcy. Many lenders, under a voluntary program with the NFCC, refund a portion of the collected debt back to the counseling agency. This action by the lenders adds weight to the argument that consumers can often arrange debt relief themselves.