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Hurricane’s Florence Impact on North Carolina and Collections Activity

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North Carolina: Collections Activity Impacted in the Wake of Hurricane Florence

On September 17, 2018 North Carolina Department of Insurance Commissioner, Mike Causey, has issued  an amended order to NCGS58-2-46, providing for state of disaster automatic stay of proof of loss requirements, premium and debt deferrals.    Premium finance companies, collection agencies and other persons subject to Chapter 58 “are required to provide their customers adversely affected in the disaster area specific relief of the insureds, payment, submission of claims and other responsibilities.  You are encouraged to review the statutory requirements for proper implementation.  Consumers impacted by the disaster are to be allowed additional time for their requests to be received and reviewed.  Additionally, for cases that have been accepted and additional information is being submitted, the time-frames for receiving this information will also be extended.”

Impacted Counties in North Carolina (click to see FEMA’s map)

The order will expire 90 days from the date of issuance of the order.  The order was amended on September 19, 2018 to include the North Carolina Counties of Beaufort, Bladen, Brunswick, Carteret, Columbus, Craven, Cumberland, Duplin, Harnett, Jones, Lenoir, New Hanover, Onslow, Pamlico, Pender, Robeson, Sampson and Wayne counties.

New Colorado Website Requires Updated Communication to Consumers

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Communication with Colorado Consumers must reflect the new website: www.coag.gov/car

Greetings,

It has recently come to our attention that some collection agencies may be using an outdated website address in communication with Colorado consumers in connection with debt collection. The website address (WWW.AGO.STATE.CO.US/CADC/CADCMAIN.CFM) listed in § 5-16-105(3)(c) of the Colorado Fair Debt Collection Practices Act (CFDCPA) is no longer valid.

Pursuant to this statute, in the event the listed website is changed, a debt collector is required to correct its communication with consumers to reflect the new website address. The correct website address that must be used on all communication in connection with debt collection is: www.coag.gov/car.

Please review your written communication records to ensure Colorado consumers receive the correct website address. If you have questions and/or concerns, please contact the Consumer Credit Unit at the phone number or email address below.

Sincerely,

Collection Agency Regulation
Colorado Department of Law
Consumer Protection Section, Consumer Credit Unit
Ralph L. Carr Colorado Judicial Center
1300 Broadway, 6th Floor
Denver, CO 80203
(720) 508-6020
(720) 508-6033 (fax)
[email protected]
www.coag.gov/car

You can always place your trust in the experts at Cornerstone Support, Inc. to navigate keeping your licenses current so that your company can focus on more important business.  Contact us if you have questions on a Colorado License Renewal or if you need help with renewing any debt collection licenses.

Update: Colorado License Renewal Certificate

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Update: Colorado License Renewal Certificate

The Regulator in Colorado has sent important information to clarify expectations regarding the renewal application. The common question asked by debt collection companies is, “When and how will debt collection companies receive the Colorado 2018-19 renewal certificate and can they operate before receiving approval?”  

The answer from the regulator:  Once your renewal application has been reviewed and deemed complete by the Colorado office, the 2018-19 license renewal certificate will be emailed to the licensing contact provided on the renewal application form. Please note that due to the high volume of renewal applications, it may take several weeks for our office to review your submitted renewal application and email your license renewal certificate. You may continue to operate until your license is issued or denied.

You can always place your trust in the experts at Cornerstone Support, Inc. to navigate keeping your licenses current so that your company can focus on more important business.  Contact us if you have questions on a Colorado License Renewal or if you need help with renewing any debt collection licenses.

Update: DC Student Loan Servicer License

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From The Desk of the Regulator:

Student Loan Servicing Amendment

The council of the District of Columbia amended the Department of Insurance and Securities Regulation Establishment Act of 1996 to among other things license student loan servicers.  Section 31-101 of the DC code defines student loan servicing as the process of collecting payments and interest and performing other administrative tasks associated with maintaining a student education loan.  The term “student loan servicing” includes:

  1. Receiving any scheduled periodic payments from a student loan borrower or notification of payments;
  2. Applying payments to the student loan borrower’s account pursuant to the terms of the student education loan or contract governing the servicing;
  3. Maintaining account records for the student education loan during a period when no payment is required on the loan; and
  4. Communicating with the student loan borrower regarding the student education loan; and having other interactions to assist a student loan borrower, including activities to help prevent default on obligations arising from a student education loan.

After reviewing the language in this amendment, a number of collection agencies engaged in the collection of delinquent student loans have asked Cornerstone to assist them in obtaining a license as a student loan servicer in the District of Columbia.  As part of the application process in DC, applicants are required to provide a description of student loan related services to be rendered in DC.  While those descriptions are detailed and specific to the individual applicant, they are similar in that they all attempt to collect delinquent student loan balances from borrowers in the District of Columbia.  To date, the DC Associate Commissioner of Banking has responded to all collection agencies applying for a student loan servicer license in DC with a letter stating that a student loan servicer license is not needed to conduct the activities described in the application materials provided.

What This Means For You

The DC Department of Insurance, Securities and Banking administers the student loan servicer licensing program in Washington DC.  While they are aware of the industry concerns related to operating without a license, they have not at this time issued an advisory opinion, established a rule, or published any other authoritative guidance that specifically exempts the activities traditionally performed by a collection agency from the definition of a student loan servicer.  In the absence of any authoritative guidance on the subject, they have agreed to process applications where the agencies or clients they represent have a different interpretation of the underlying statutes.

Oregon Licensing and Compliance Requirements

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On August 2, 2017, the governor of Oregon signed into law a bill amending Oregon’s collection licensing and compliance statutes and creating new obligations for debt buyers.  Most of the new provisions will go into effect January 1, 2018.

Please consider the following:

  1. Debt buyers, including passive debt buyers, operating in Oregon will be required to obtain an Oregon collection agency license.  Debt buyers that are not already licensed should submit a license application to ensure they are in compliance with the new licensing requirements when they go into effect.
  2. The new law will require debt buyers and debt collectors to provide certain Oregon consumers documents proving the existence and assignment of the debt and the itemized account balance within 30 days of the consumer’s request.
  3. Similar to laws recently enacted in Colorado and Maine, debt buyers and collection law firms filing suit against Oregon consumers on the purchased debt will be required to include certain information and documentation to maintain a cause of action. For example, a lawsuit must establish the existence and assignment of the debt and itemize the account balance in the collection complaint.
  4. Collection agencies and debt buyers operating in Oregon will be subject to 30-day notification requirements upon the change of the company’s name, address, officers, directors, or managers, and 10-day notification requirements after entry of a regulatory action or consent order with another state.
  5. Oregon collection agencies must also maintain E&O insurance and will be prohibited from engaging in Oregon collection activity if E&O coverage lapses.

Is it time to look at E&O options for your company? Don’t settle – there are more options than you think. We would love to talk to you about Integrity First Insurance, our in-house insurance agency. Reach out to us here.

The new Oregon law also creates other new licensing and compliance requirements and obligations.  Debt collectors and debt buyers operating in Oregon should closely review the new law with their legal and compliance teams.

Review the enrolled bill here. 

Maryland Transitioning to NMLS

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Effective August 1, 2017 the Maryland Office of the Commissioner of Financial Regulation (OCFR) will transition all licenses under its authority to the NMLS licensing system.  The mandatory transition of all licensees begins on August 1, 2017, with the transition period ending on September 30, 2017. All licensees are required to complete the transition to NMLS by entering their current information onto the system during the transition period. In addition, licensees must obtain a unique NMLS account number and update their licensing information no later than September 30, 2017 as part of the continued ability to do business in Maryland.

Updates to Colorado’s Fair Debt Collection Practices Act

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Judge

On April 3 the Colorado General Assembly held a hearing and updates are coming to Colorado’s Fair Debt Collection Practices Act.

Here’s what you need to know:

  • Colorado is proposing to do away with its Collection Agency Board, replacing it with a set of requirements for a single administrator.
  • A recommendation was made to Continue the CFDCPA for 11 years, until 2028.
  • “Debt Buyers” are collection agencies per Colorado’s FDCPA.

While this is just Colorado, many states discuss policies with each other and what’s happening in Colorado could become popular elsewhere.

Read more from Inside ARM here.

From the Desk of the Regulator – Arizona

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There are some major changes happening with the Arizona Department of Financial Institutions.

Here’s what you need to know:

1. Arizona has transitioned to NMLS to manage Collection Agency Licenses.

Each company holding an AZDFI Collection Agency License who wishes to manage their license on NMLS must create a company record in the system, both for the company itself and for each branch holding an AZDFI Collection Agency License. NMLS will annually charge a processing fee of $100 per company license, and $20 per licensed branch location renewed through the system. There is no processing fee for submitting a new application or transitioning an existing license onto NMLS.

All forms must be received by January 31, 2017.

NMLS is a secure web-based system created by state regulators to provide efficiencies in the processing of state licenses and to improve supervision of state-regulated industries. Through NMLS, companies maintain a single record which they use to apply for, maintain, renew, and surrender license authorities in one or more states.

View the transition checklist: AZ_Collection_Agency_License-Company-Transition-Checklist.pdf

It’s important that current licensees have the appropriate transition number available when completing and submitting their company form so they are not charged a new application fee.

More information about NMLS can be found on the NMLS Resource Center.

2. A 60-day approval is now required for any ownership changes.

The new Arizona State checklist says an ownership change now requires 60-day prior approval. Be proactive and prepared!

3. Arizona will no longer accept paper documents for changes.

It’s imperative (and mandatory) that you update all forms and transition to NMLS as Arizona will no longer accept any paper documents for changes.

If you have any questions about the recent changes, feel free to call us.

Montana Division of Banking Requires Consumer Loan License For Collections

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The Montana Division of Banking and Financial Institutions has issued the following opinion:

“It is the opinion of the Division that the provisions of the Act continue to apply to an entity that acts as a servicer by receiving or accepting payments due pursuant to a Montana Consumer Loan and either keeping those payments or directing them to another entity(s). It is the opinion of the Division that a servicer of Montana Consumer Loans must be licensed under the Act.”

As defined in Mont. Code Ann. § 32-5-102(2)(a), “‘Consumer Loan’ means credit offered or extended to an individual primarily for personal, family, or household purposes, including loans for personal, family, or household purposes that are not primarily secured by a mortgage, deed of trust, trust indenture, or other security interest in real estate.”

Kelly M. O’Sullivan, Staff Attorney for the Montana Division of Banking and Financial Institutions, confirmed to Cornerstone Support that a debt collector of Montana Consumer Loans is a “servicer” and is subject to licensure.

For a complete copy of the memorandum from the Division, click Memorandum.

Should you have any questions or issues concerning this matter or should you wish to engage Cornerstone Support’s assistance in obtaining specific licenses or registrations, contact a Cornerstone Support licensing consultant today at 888-445-8660 or e-mail us at [email protected].

From the Desk of the Regulator

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Idaho – Major improvements to Collection Agent Filing Process

The Idaho Department of Finance and Access Idaho have made MAJOR improvements in the way Idaho Collection Agency Licensees will report their agents that will significantly reduce their efforts in meeting this requirement.  Beginning with the September 2016 filing, all agents and RPICs will be listed under the licensed home/main office.  This includes new and terminated agents for quarterly filings, and will include ALL agents for the annual filing in March. Previously, agents were reported by work location which resulted in multiple reports that had to be filed.  The reporting steps for filing reports have not changed—the only change is that now licensees will file all information requirements in one report instead of several.

This change was done to simplify the reporting process over the long term and to help reduce the regulatory burden on our licensees.  Access Idaho and Department staff are excited to launch these improvements sooner than was expected and we appreciate your patience during this transition period.  Please direct any questions to [email protected] or to 208-332-8002.

The “Go Live” date for the new Agent Reporting was 8/22/2016.

Massachusetts – Notice of Debt Collection Informational Session on September 22, 2016

The Massachusetts Division of Banks (Division) and the Massachusetts Office of the Attorney General are seeking input on the current state of debt collection and debt collection regulation within the Commonwealth.  The Division and the Office of the Attorney General are considering whether changes to the statutory and regulatory framework regarding debt collection may be warranted.  Read more

New Jersey – Statute of Limitations reduced to 4 years for collections of retail credit card debt

An August 30 article from the Daily Digest of AccountsRecovery.net reported that the Appellate Division of the State of New Jersey Superior Court ruled on August 29 that the statute of limitations for collections of retail credit card debt should be one governing the sale of a good (4 years) rather than the one governing contractual claims, including general purpose credit cards (6 years).  

From the Desk of the Regulator: Iowa

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Recent information from the office of the Iowa Attorney General that addresses specific requirements for creditors and debt collectors.

Creditor/Assignees:

All creditors who engage in consumer credit transactions in Iowa are subject to the Iowa Consumer Credit Code (ICCC). These creditors, or assignees that purchase their transactions, must file notification with the ICCC Administrator and pay the required fees. The Attorney General serves as the ICCC administrator.

The ICCC requires all creditors and assignees to pay an annual notification fee of $10.00. Creditors/assignees who own the paper for consumer credit transactions must also pay a volume fee based on the average unpaid balance of all consumer credit transactions. The volume fee is $10.00 for every $100,000 of average unpaid balances on all Iowa consumer credit transactions. The purpose of assessing these fees is to ensure that all creditors and assignees contribute to the cost of enforcing the ICCC, and the law stipulates that all fee money collected be put to that use.

Creditors and Assignees required to file notification with the Iowa Attorney General must do so within 30 days of commencing collection activities in Iowa, and then by January 31 of every subsequent year. With the exception of new filers, notifications received more than 30 days after the due date will be assessed a $25.00 late fee.

Debt Collectors:

Iowa does not license debt collectors. However, debt collectors who collect over $25,000 a year (all accounts, not just Iowa accounts) are required to file notification with the Attorney General of Iowa and pay a $10 annual fee.

Our office vigorously enforces the Iowa Debt Collection Practices Act. We strongly urge all debt collectors to become familiar with this law and to consult with private legal counsel, as necessary, before beginning collection activities in Iowa.

Debt collectors who fail to file notification with the Office of the Attorney General and pay the appropriate fee may be subject to late fees of $25, as well as a possible civil action in which the administrator may recoup interest, the costs of the action, and a penalty not exceeding the greater of $1,000 or three times the fee owed.

Debt Collectors required to file notification with the Iowa Attorney General must do so within 30 days of commencing collection activities in Iowa, and then by January 31 of every subsequent year. With the exception of new filers, notifications received more than 30 days after the due date will be assessed a $25.00 late fee.

How to File:

Online: You can file online and pay the $10.00 annual registration fee and any applicable volume fees (if any) through our website, www.iowaattorneygeneral.gov; under the “For Businesses” section. This system does not allow payment via credit card. The online payment option requires filers to enter bank account information to establish an automatic debit. Filers paying by auto-debit will be charged a $1.00 convenience fee.

By Mail: If you prefer, you can fill out the printable form along with a check. Checks should be made payable to “Iowa Consumer Credit Administration Fund” and sent, along with the completed Creditor/Assignee Notification Printable Form* to:

Office of the Attorney General of Iowa
Consumer Protection Division
Attn: Notification & Fees Administrator
1305 E. Walnut St.
Des Moines, IA 50319-1016

Email: [email protected]

*Additional documents are not required.

Entities who have filed notification by mail with the Office of the Attorney General will not receive a confirmation, notice or hard copy license. Only those filing with rejected notifications will be notified by our staff. Those filing online will receive automatic confirmation notice upon completion.

Much more information regarding the ICCC can be found on our website www.iowaattorneygeneral.gov under the “For Businesses” section.

From the Desk of the Regulator: Colorado

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The Colorado Attorney General’s Office announced that the website address required to be listed on initial debt collection communications has been updated.

Colorado law requires collection agencies to include a disclosure in initial communications with consumers that includes the website address for the Colorado Attorney General’s Office. The Colorado Attorney General’s Office announced the address change in a recent e-mail sent to Colorado licensees. Notably, the text of the state statute requiring the disclosure (see below) has not been amended and still currently lists the old website address for the Attorney General’s office. However, the statute specifically stipulates that “[I]f the website address is changed, the notification shall be corrected to contain the correct address.”

The text of the statute, as listed in the Colorado Revised Statutes states:

In its initial written communication to a consumer, a collection agency shall include the following statement: “FOR INFORMATION ABOUT THE COLORADO FAIR DEBT COLLECTION PRACTICES ACT, SEE WWW.AGO.STATE.CO.US/CADC/CADCMAIN.CFM.” If the website address is changed, the notification shall be corrected to contain the correct address. If the notification is placed on the back of the written communication, there shall be a statement on the front notifying the consumer of such fact.

Current Required Text

With the announcement of the new website, the required disclosure in debt collection notices must be updated to the following text:

“FOR INFORMATION ABOUT THE COLORADO FAIR DEBT COLLECTION PRACTICES ACT, SEE WWW.COAG.GOV/CAR.”

Other Changes

Along with the new website address, the Attorney General’s Offices also recently went through a change in its e-mail systems. All new e-mail addresses now coincide with the new website and end in @coag.gov. Additionally, the regulator made a slight change to its main licensing and registration e-mail address, which is now listed as:
[email protected] – (please note the change from “cab” to “car”).

The old e-mail addresses will only reroute to the new e-mail system for a limited time; therefore, it is best to update your records now to ensure proper delivery of any e-mails sent to the regulator.

From the Desk of the Regulator: North Carolina

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The North Carolina collection agency 2016 renewal application process opens April 7 and closes midnight June 30.

Financial Statements

  • Ensure that the balance sheet meets the statutory licensing requirement of a positive net worth/equity greater than $5,000.
  • An officer attestation is required for internally prepared statements, as well as compilations prepared by a CPA/firm.

Demographic Updates (address/license contact/officers, owners) can be made using any of the three (3) choices:

  1. April 7th thru June 30th: Using the electronic renewal application
  2. July 1st thru April 1st: Click here.
  3. Anytime: Submission of paper address change request form

Surety Bonds

  • Continuation certificates and/or riders can be provided in lieu of a new bond.
  • The bond expiration date should not occur before June 30, 2017.
  • The bond calculation worksheet determines the amount of Renewal Bond #1. The minimum amount of this bond is always $10,000 and the maximum amount is $75,000. Depending on the amount of line (E) on the worksheet, the bond can be any amount in between.

Notifications

  • If you don’t receive an email confirmation, your renewal application has NOT been received. Remember to press SUBMIT when ready…Literally!!
  • Confirm the email addresses of all company contacts – it is recommended that a single email address NOT be used for everyone.
  • Renewal reminders will be sent every 30-days until the deadline date.
  • Do not wait until the last minute to apply; extensions are typically NOT granted.
  • Non-renewed licenses lapse at midnight June 30, 2016.

For more information visit us on the web: NC DOI Home Page

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