Collector- June 2018 - 54

It's a Matter of Trust
Reviewing state laws to determine trust account requirements.

A

fter successfully collecting on
consumer accounts for your
client, what do you do with all
the funds received? In some states the
law provides an answer by requiring debt
collectors to maintain a trust account.
This particular kind of account, in
debt collection terms, is a type of bank
account used to deposit client funds and
prevent them from comingling with the
general business funds of the agency.
When collecting in states that require
trust accounts, the laws surrounding
them tend to focus on three distinct
areas: in-state agency requirements,
out-of-state agency requirements and
account location requirements.
Many states require debt collectors to
maintain trust accounts as a condition of
being licensed. Alaska, Illinois, Michigan
and Washington are a few examples of
states that have this requirement. The state
laws regarding trust accounts often include
instructions on how to handle the funds
received from consumers and sometimes
provide timeframes by which the funds
in the account must be disbursed to the
collection agency's clients.
Some state laws require trust accounts
be maintained by both collectors that
are located within the state as well as
collectors located outside of the state. The
laws of at least one state are silent as to a
trust account requirement for out-of-state
collectors, which would require that a debt
collector located outside of the state to
contact the state's licensing authority for
guidance on the requirements.
Another element of trust accounts
regulated by state law pertains to how and
where the accounts can be maintained.
For example, a state may require debt
collectors to utilize banks with a presence
in the state to establish their trust accounts.
Other states may exempt collectors from
maintaining a trust account within its

54

borders if the debt collector maintains one
or more trust accounts in other states.
For more information on trust accounts
and the requirements surrounding
them, ACA members can review ACA's
SearchPoint™, #2041 Trust Account
Information, which provides collectors with
information about laws concerning trust
account requirements in a convenient and
searchable format. ACA members can also
review ACA's SearchPoint™ document #3005,

the Interstate Chart, for an at-a-glance view of
states that require trust accounts by law.
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, visit www.acainternational.
org/searchpoint.

BENEFIT
YOUR
VOICE
HEARD

Advocacy
Education
Assurance
Call Customer Care:
(800) 269-1607

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.

ACAINTERNATIONAL.ORG


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