Indiana committee hears testimony on bill to regulate paid VA claim preparers

Senator Baldwin told the Indiana Senate committee that House Bill 16 70 would create a "Veteran Empowerment Act" to allow veterans to seek paid local help to apply for VA benefits under state regulation while restricting predatory practices.

The bill would set limits on what paid preparers may collect — a cap of five times the amount of any increase in benefits or a maximum of $12,000 — and would require providers to disclose free options available to veterans, Baldwin said. "Weare trying to address bad actors," Baldwin said in opening remarks.

Supporters including industry representatives, veterans and service organizations told the committee they back tighter state guardrails to prevent so‑called "claim sharks" from exploiting veterans while preserving consumer choice. William Taylor, co‑founder and CEO of Veterans Guardian VA Claims Consulting, said his company employs about 200 people near Fort Bragg and that the firm averages a 90 percent success rate and decisions in roughly 85 days, about half the national average. Taylor said he supports regulation and asked the state to "put guardrails and protections in place for what is currently an unregulated space." He said veterans should be fully informed when they pay for services and know free options exist.

Peter O'Rourke, president of the National Association for Veteran Rights and a former acting VA secretary, provided historical context about the development of accreditation and privately offered services for fully developed claims, saying the market contains both "significant, good actors and some bad actors" and describing HB 16 70 as a step toward modernization and guardrails.

Several veterans and veterans organizations urged the committee both to protect veterans from exploitation and to preserve access to paid help when a veteran knowingly chooses it. Lisa Wilkin, an Air Force veteran and Hall of Fame advocate, described a World War II veteran who paid $1,400 to a private firm for aid‑and‑attendance help and whose claim sat for 13 months before county veteran service officers completed it; Wilkin said the company ultimately refunded the fee after her intervention.

The Office of the Attorney General opposed HB 16 70 in its current form. Michelle Aylia, a deputy attorney general in the Consumer Protection Division, told the committee her office has investigated companies allegedly charging veterans improper fees and has brought suits under Indiana's Deceptive Consumer Sales Act. She said federal law requires accreditation for anyone assisting with the preparation of VA claims and generally prohibits fees for initial claim preparation. "Because HB 16 70 can't make legal what federal law prohibits," Aylia said, the Office of the Attorney General "cannot support the bill in its current form." She recommended language tying any state enforcement to compliance with federal law or making violation of the federal rules a violation of state consumer law.

Other witnesses proposed narrower or additional guardrails: the Military Veterans Coalition urged a state form that accredited agents must present and signature acknowledgement that free options exist; it also recommended fees be payable only on the incremental increase in a veteran's benefit (for example, fees on the increase from 10 percent to 20 percent, not the entire 20 percent). The VFW and other veteran organizations said they broadly support protecting veterans but asked for amendments to ensure alignment with federal rules and to preserve accredited representation.

The committee did not vote on HB 16 70. Committee members and witnesses said they expect an amendment and a vote at the next meeting. Chairman Thoms (Committee chair) said the panel would take testimony this week and "amend and vote on it" next week, and the committee recessed the bill for further drafting.

The discussion distinguished three categories of activity: (1) discussion and testimony about the scope and risks of paid preparers; (2) direction to draft amendments to address federal preemption and disclosure/fee mechanics; and (3) no formal committee action taken at this hearing. The Attorney Generaloffice advised that, as written, the bill could hinder its ongoing consumer‑protection litigation by creating a state statute defendants could cite to argue permissibility.

The committee plans to reconvene on the bill next week to consider amendments and a vote.