The Connecticut Department of Banking has announced a temporary change intended to help collection agencies navigate the COVID-19 outbreak. The department requires consumer collection agencies to have branch office licenses to collect at any location other than the licensed main office, but has acknowledged that companies may want to temporarily allow collectors to work from home based on concerns about the virus. Although such home locations are not currently licensed as branch offices, the department has decided to take a conditional “No Action” position on this stipulation until April 30, 2020. Read the full memo here for all of the conditions.
As an interesting aside, there has been ongoing debate within the ARM industry over the question of whether it is legally permissible for home-based collectors to contact consumers in states that require all collection activity to be performed from a licensed location (most state require some level of branch licensing). In the absence of relevant case law or other guidance, the positions on this issue have been varied.
Those who favor the idea of remote collectors note that the statutes were written before technology made this a viable prospect, allowing companies to manage collectors whether or not they are physically located in the same office. With this latest memorandum, the Connecticut Department of Banking has inadvertently weighed in on the debate and indicated that using at-home collectors is NOT permissible. While Connecticut’s expressed position has no direct impact on other states, it is interesting and something to keep an eye on going forward.