ARM Industry

Connecticut to License US Locations Only

By Matt PridemoreAugust 2, 2018
 

Update regarding new law: Connecticut to take a NO ACTION POSITION for Qualified Collection Agencies

Earlier in August we reported that Connecticut had signed into law an Act that, among other things, stated that the Connecticut Department of Banking would no longer issue consumer collection agency licenses to an office outside of the United States and its territories.

This change raised questions for those currently licensed collection agencies with offices outside of the US.

  • Would the state honor those licenses until their expiration on December 31, 2018?
  • Would they reimburse those agencies for the fees that have already been paid for 2018?

In response to these questions and others, the Connecticut’s Department of Banking issued a memorandum stating that they will take a No Action Position concerning the new requirement that any Connecticut collection activity be conducted from a “state” (US states and US territories) during the term beginning October 1, 2018 and ending December 31, 2018.   This no action position is only for companies or individuals who hold a valid license effective through December 31, 2018.  Click here to review the memorandum in its entirety.

Connecticut will not be issuing new or renewing existing collection agency licenses for an office located outside of the United States or its territories.

Original Post – August, 2 2018: Connecticut to License US Locations Only

Public Act 18-173 was recently signed into law in the state of Connecticut and will be effective October 1, 2018.  The Act makes substantive changes to The Banking Law of Connecticut including the laws that govern Consumer Collection Agencies.  As it relates to licensing, section 36a-801 of the Connecticut General Statutes have been amended to read that, “Any activity subject to licensure shall be conducted from an office located in a state, as defined in section 36a-2.”

Section 36a-2 defines state to mean any state of the United States, District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the trust territory of the Pacific Islands, the Virgin Islands and the Northern Mariana Islands.  In short, the Connecticut Department of Banking will no longer issue consumer collection agency licenses to an office located outside the United States or its territories.

The Act also provides some clarity around licensing for debt buyers by specifically including the term debt buying in the definition of a consumer collection agency and defining debt buying as collecting or receiving payment on any account, bill or other indebtedness from a consumer debtor for such person’s own account if the indebtedness was acquired from another person and if the indebtedness was either delinquent or in default at the time it was acquired.

Debt Collection Licensing Portal

Connecticut is not putting into place any licenses currently that will be revoked in October.

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