Kentucky Senate committee holds hearing on bill to regulate veteran claim consultants; no vote taken

Sen. David Yates, who represents Jefferson District 37, introduced a bill at a Senate committee hearing in Frankfort on legislation intended to regulate private consultants who assist veterans with Department of Veterans Affairs claims and to require clearer disclosures and fee limits.

The bill’s sponsor said the measure is aimed at protecting veterans from ‘‘vultures’’ who take large fees and that it would require written disclosures, limit fees and require clear statements that private firms are not accredited or affiliated with the VA or veterans service organizations. ‘‘We want that open disclosure,’’ Sen. David Yates said.

The issue has drawn testimony from veterans service organizations and private firms. James Tebbe, legislative chairman for the Veterans of Foreign Wars (VFW) Department of Kentucky, told the committee that the bill in its current form ‘‘violates the code of federal regulations, which prohibits charging a veteran a fee for filing their initial claim.’’ Tebbe urged lawmakers to reject the current draft and instead pass legislation that ‘‘mirrors federal law and actually enforces penalties that provide real protections for Kentucky veterans.’’

Representatives of private consulting firms said veterans need options because statewide capacity among accredited service officers is limited. Mark Christiansen, chief of staff for Veterans Guardian, said Kentucky has ‘‘only 71 VSO representatives to service over 272,000 veterans in the state’’ and argued the bill should include specific consumer protections such as a dollar cap on fees, bans on late fees and interest on payment plans. ‘‘Veterans need options,’’ Christiansen said.

Daryl Casey, legislative chairman for the Joint Executive Committee of Veteran Organizations (JECVo) and a veteran service officer, said his organization supports a level playing field but wants fee limits comparable to those that apply to attorneys. ‘‘We just want the playing field to be leveled,’’ Casey said.

Committee chair Sen. Deneen emphasized the panel was conducting a hearing, not voting, and asked the sponsor to work with veterans service organizations on amendments. The committee also noted an internal rule limiting committee substitute language within 24 hours, meaning draft changes will be circulated with enough time for review. Committee members signaled broad agreement that guardrails are needed but differences remain over whether the draft could conflict with federal regulations and how to set fee limits.

No formal vote was taken. The committee directed the bill sponsor to produce proposed amendments and to meet with VSOs and other stakeholders; the chair indicated the issue would return to a future meeting and mentioned the possibility of meeting at 8 a.m. next week to continue discussion.

The transcript records references to federal regulation cited by witnesses as ‘‘38 CFR 14 6 3 6’’ and repeated concerns that charging a fee for initial VA claims may be federally prohibited. Witnesses and senators discussed proposals ranging from capping fees at ‘‘five times’’ a beneficiary’s monthly benefit in some states to lowering that to ‘‘three times’’ in this draft, with the sponsor saying he favored guardrails over a complete ban. The bill’s text and the sponsor’s proposed amendments were not filed or voted on during the hearing.

The committee hearing drew three registered witnesses representing the VFW, a private consulting firm and JECVo, and multiple senators asked the sponsor to continue negotiations. The chair closed the meeting by saying the issue will be brought back to the committee with additional time for testimony and review.

Plans and timelines for any enforcement mechanism, exact fee caps (dollar amounts), and the bill’s final language were not specified during the hearing.