Collector - July 2018 - 17

COVER

W

hen you imagine a bold explorer, you might think of
someone going to a faraway land, discovering new flora
and fauna and encountering fascinating new cultures.
Surprisingly, certain aspects of debt collection can also be likened
to an expedition to a strange and unfamiliar land, particularly when
you expand your collection business to a new state.
Adventurous agency owners thinking about embarking on
such a journey should rigorously research the laws of the states in
which they intend to begin collecting. You will want to consider
issues such as licensing, trust accounts, location requirements,
employee requirements and debt collection laws particular to the
state. With this knowledge, you can determine whether or not it
would be a good business move to collect in a certain state while
limiting possible liability.

LICENSING
First, consider state licensing requirements. Not all states have
licensing requirements, and some states may not have a statewide
licensing requirement but do require a license at the municipal
or city level.
For instance, New York state does not have a license requirement,
but three of its cities (Buffalo, New York City and Yonkers) currently
do. That's why it's imperative to make a thorough determination
whether the new collection location will trigger any licensing
requirements.
You'll want to review state law and investigate any city regulations
or ordinances. If the laws are silent as to the necessity of a license,
then you should still determine if your company needs a certificate
of authority to do business in that state. A state's Secretary of State
website often provides guidance on forms and requirements for
certificates of authority.
Even if a state does not have a general debt collection license
requirement, it may still have a license requirement for a servicing or
collecting on a specific type of loan or other debt.
For example, California does not require debt collectors to be
licensed. However, entities that service student loans made to
California residents must obtain a license from the Commissioner of
Business Oversight. The definition of "servicing" includes receiving
any scheduled periodic payments from a borrower or any notification
that a borrower made a scheduled periodic payment and applying
payments to the borrower's account. The type of debt that an agency
services or collects can determine whether or not a license is needed.
Some states have licensing exemptions, often with certain
conditions. For example, agencies that do not have any physical
presence or agents in the state and only use letters and phone
calls to collect debts are frequently exempt from state license
requirements. Some states caveat their exemptions with the
requirement that only debt collectors whose home states provide
similar exemptions can qualify. When making a determination

COLLECTOR 07.18

17



Table of Contents for the Digital Edition of Collector - July 2018

Upfront
Industry News
Best Practices
FYI
Collection Tips
Navigating Uncharted Territory
Making Sense Out of Collection Notice Requirements
Do You Need to Contact Creditors to Verify a Debt?
Calendar
Honor Roll
Getting on the Right Path
A Better Framework
ACA Members Contribute to Successful Collectors Challenge Month
The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Connecting with Legislators at ACA’s Washington Insights Conference
Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Compliance
ACA SearchPoint
Ad Index
Last Word
Collector - July 2018 - Cover1
Collector - July 2018 - Cover2
Collector - July 2018 - 1
Collector - July 2018 - 2
Collector - July 2018 - 3
Collector - July 2018 - Upfront
Collector - July 2018 - 5
Collector - July 2018 - Industry News
Collector - July 2018 - 7
Collector - July 2018 - 8
Collector - July 2018 - 9
Collector - July 2018 - Best Practices
Collector - July 2018 - 11
Collector - July 2018 - FYI
Collector - July 2018 - 13
Collector - July 2018 - Collection Tips
Collector - July 2018 - 15
Collector - July 2018 - Navigating Uncharted Territory
Collector - July 2018 - 17
Collector - July 2018 - 18
Collector - July 2018 - 19
Collector - July 2018 - 20
Collector - July 2018 - 21
Collector - July 2018 - 22
Collector - July 2018 - 23
Collector - July 2018 - Making Sense Out of Collection Notice Requirements
Collector - July 2018 - 25
Collector - July 2018 - 26
Collector - July 2018 - 27
Collector - July 2018 - 28
Collector - July 2018 - 29
Collector - July 2018 - Do You Need to Contact Creditors to Verify a Debt?
Collector - July 2018 - 31
Collector - July 2018 - 32
Collector - July 2018 - 33
Collector - July 2018 - 34
Collector - July 2018 - 35
Collector - July 2018 - Calendar
Collector - July 2018 - Honor Roll
Collector - July 2018 - Getting on the Right Path
Collector - July 2018 - 39
Collector - July 2018 - A Better Framework
Collector - July 2018 - 41
Collector - July 2018 - ACA Members Contribute to Successful Collectors Challenge Month
Collector - July 2018 - 43
Collector - July 2018 - 44
Collector - July 2018 - 45
Collector - July 2018 - The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Collector - July 2018 - 47
Collector - July 2018 - Connecting with Legislators at ACA’s Washington Insights Conference
Collector - July 2018 - 49
Collector - July 2018 - Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Collector - July 2018 - 51
Collector - July 2018 - Compliance
Collector - July 2018 - 53
Collector - July 2018 - ACA SearchPoint
Collector - July 2018 - Ad Index
Collector - July 2018 - Last Word
Collector - July 2018 - Cover3
Collector - July 2018 - Cover4
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