Cooperatives May Offset Bad Debt With Capital Credit Balances
Like for-profit companies, cooperatives encounter bad debt of members and patrons. They can initiate collection efforts to pursue bad debts, but because their members are also their owners, debt collection can be a complicated endeavor. With regard to former members, a recent IRS private ruling discussed an alternative option for recovering outstanding balances.
Some electric cooperatives consider consumers’ credit scores in reviewing their applications for electric service. Cooperatives that sponsor financing programs for their members may review members’ credit scores as well. The Federal Trade Commission and Federal Reserve Board recently made changes to the Risk-Based Pricing Rule (the “Rule”) that will now require cooperatives to disclose credit score information to consumers and members in certain situations.Read More »Substantial Changes To Required Credit Notices to Consumers