One of the new credit card law's lesser-known provisions is funneling distressed borrowers to credit counselors, an industry once tarred as predatory. In an ironic twist, that outcome pleases consumer advocates more than it does some bankers.

The provision, which took effect last month, requires credit card issuers to refer cardholders to federally sanctioned counseling agencies. Such firms provide advice and workout plans to consumers falling behind on their loans.

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