Collector - October 2017 - 46
Licensing Requirements at a Glance
Here's a quick way to keep up with state licensing laws.
ebt collection licensing can be
a confusing subject. While a
few states don't have licensing
requirements for debt collectors, most do.
However, requirements across the states are
not uniform. Prior to obtaining a license,
debt collectors need to determine which
states require a license to collect debt as
well as any potential licensing exemptions
for out-of-state debt collectors and other
conditions of licensure, such as trust
accounts, bonds and licensing fees.
You'll need to review state license
requirements carefully as certain debt
collectors may be exempt. Often, in order
to qualify for the out-of-state licensing
exemption, debt collectors must not
maintain a physical presence in the state
and may only collect debts by use of
interstate communications, which usually
includes telephone, mail or fax.
As a condition of exemption, some states
also require the debt collector to be located
in a state that provides a similar licensing
exemption for debt collectors in their state.
Some states also oblige exempt collectors
to refrain from soliciting accounts from instate creditors.
Many states require licensees to maintain
a trust account and/or take out a bond.
Required bond amounts vary by state,
as do requirements on whether trust
accounts must be maintained in a resident
bank. Even in states with no trust account
requirements, the state may still place
obligations on how debt collectors handle
their client's money. For instance, state law
may mandate how often licensees must
remit funds to their client.
The fees associated with a license also
vary, ranging from under $100 to over
$1,000. When evaluating the cost of a license,
collectors should also take into account
whether licenses are renewed annually or
extend for a longer period of time.
Because license requirements vary widely,
debt collectors need to carefully review
the particular requirements for each and
every state in which they are attempting to
collect. ACA International compiles state
licensing laws in one convenient place for
its members: ACA SearchPoint™ document
#3005, ACA's Interstate Chart. This chart
gives members an up-to-date, at-a-glance
listing of state license requirements,
including available exemptions.
Other related ACA SearchPoint™
documents covering licensing requirements
include State Licensing/Registration Contact
Information and Fees; Trust Account
Information; State Manager Requirements;
and State Registration Requirements for
Have you checked out the member-only ACA
SearchPoint™ library? This valuable resource
is filled with documents that put important
compliance information related to the
FDCPA, FCRA, TCPA, state laws and many
other topics at your fingertips. To access it,
Call Customer Care:
There has never been
a time more critical in
the credit and collection
industry. Join your fellow
industry professionals to learn and
stand together for your business to
thrive in this new environment.