Debt Collection Agency State Law Compliance. Licensing Requirements & Tips to Start your Business
Holmes Publications
July 20, 2009
www.cornerstonesupport.com
By State Debt Collection Licensing Expert Matt Pridemore
Each state has the right to enact its own set of collection laws and requirements. For agencies seeking nationwide compliance, this creates a gauntlet of regulations that is not only confusing, but can prove costly if misunderstood or neglected. Not all states issue debt collection licenses. The following is a list of jurisdictions that issue debt collection licenses and/or have statutory bond requirements:
Alaska, Arizona, Arkansas, City of Buffalo, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York City, North Carolina, North Dakota, Oregon, Rhode Island, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, Wyoming
It should be noted that several of the aforementioned states provide exemptions to agencies depending on a number of specific organizational and operational factors. Here is a summary of several possible statutory exemptions available to debt collectors:
▪ Out-of State Agency Exemption – Certain states provide exemptions from their state debt collection license requirements for those entities that do not maintain a physical presence in their state and are only collecting debts via interstate communication (phone, mail, etc.) for a creditor that is not physically located in their state.
▪ Commercial Exemption – Certain states provide exemptions from their state debt collection licensing requirements for those entities that collect 100% commercial (business to business) debt.
▪ Debt Buyer Exemption – Certain states provide exemptions from their state debt collection licensing requirement for those entities that purchased the charged-off accounts that they are attempting to collect. Please note, however, that the only entity entitled to such an exemption is the corporate entity that purchased the bad debt. Any other entity (related party or not) would not qualify for the debt buyer exemptions.
▪ Collection Attorney/Collection Law Firm Exemption – Certain states provide exemptions from their state debt collection licensing requirements to collection attorneys and/or collection law firms. Certain of these statutory exemptions are available to all collection attorneys and/ or collection law firms and others are reserved for those attorneys licensed to practice law in the state granting the potential exemption.
Cornerstone Support has established a reputation as the premier licensing service provider to the collection industry. We understand the particular nuances of licensing all types of collection agencies and are professionally staffed and trained to get your agency licensed faster than anyone else in the industry. We realize that your time is best spent on the moneymaking ventures of your business. In allowing us to take care of your licensing, you can be assured that you are compliant in every state without the stress of managing every detail. For more information on state collection agency licensing you can visit our website at www.cornerstonesupport.com or call us at (770) 587-4595.
By State Debt Collection Licensing Expert Matt Pridemore
Each state has the right to enact its own set of collection laws and requirements. For agencies seeking nationwide compliance, this creates a gauntlet of regulations that is not only confusing, but can prove costly if misunderstood or neglected. Not all states issue debt collection licenses. The following is a list of jurisdictions that issue debt collection licenses and/or have statutory bond requirements:
Alaska, Arizona, Arkansas, City of Buffalo, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York City, North Carolina, North Dakota, Oregon, Rhode Island, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, Wyoming
It should be noted that several of the aforementioned states provide exemptions to agencies depending on a number of specific organizational and operational factors. Here is a summary of several possible statutory exemptions available to debt collectors:
▪ Out-of State Agency Exemption – Certain states provide exemptions from their state debt collection license requirements for those entities that do not maintain a physical presence in their state and are only collecting debts via interstate communication (phone, mail, etc.) for a creditor that is not physically located in their state.
▪ Commercial Exemption – Certain states provide exemptions from their state debt collection licensing requirements for those entities that collect 100% commercial (business to business) debt.
▪ Debt Buyer Exemption – Certain states provide exemptions from their state debt collection licensing requirement for those entities that purchased the charged-off accounts that they are attempting to collect. Please note, however, that the only entity entitled to such an exemption is the corporate entity that purchased the bad debt. Any other entity (related party or not) would not qualify for the debt buyer exemptions.
▪ Collection Attorney/Collection Law Firm Exemption – Certain states provide exemptions from their state debt collection licensing requirements to collection attorneys and/or collection law firms. Certain of these statutory exemptions are available to all collection attorneys and/ or collection law firms and others are reserved for those attorneys licensed to practice law in the state granting the potential exemption.
Cornerstone Support has established a reputation as the premier licensing service provider to the collection industry. We understand the particular nuances of licensing all types of collection agencies and are professionally staffed and trained to get your agency licensed faster than anyone else in the industry. We realize that your time is best spent on the moneymaking ventures of your business. In allowing us to take care of your licensing, you can be assured that you are compliant in every state without the stress of managing every detail. For more information on state collection agency licensing you can visit our website at www.cornerstonesupport.com or call us at (770) 587-4595.
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