Cornerstone Support offers several levels of initial licensing services designed to accommodate both your needs and your budget.
Comprehensive Licensing Service
Cornerstone Comprehensive Service is the premier licensing service for collection agencies, debt buyers and attorneys. Cornerstone Support facilitates the entire licensing process from the preparation of the applications to the approved state license. Cornerstone Support will generate and complete all necessary applications, supplements, and questionnaires. In addition, Cornerstone Support will setup registered agents, resident managers, and remote offices as required. Finally, Cornerstone Support will submit the necessary documents to the appropriate state offices and then follow-up as needed.
Select Licensing Service
Cornerstone Select Service is an extremely economical service in which Cornerstone Support prepares license applications and supplements for collection agencies. Select Service clients receive pre-filled applications including supplements, instruction checklists, and state contact information.
The complexity of licensing requirements varies significantly from state to state. At a macro level an agency must perform the following tasks in order to be licensed in a given state:
Assign a Registered Agent/Agent of Record
A registered agent is responsible for receiving important legal and tax documents including: notice of litigation (service of process), franchise tax forms and annual report forms. Entities are required to maintain a registered agent in every state in which they obtain a Certificate of Authority.
Obtain a Certificate of Authority
A certificate of authority is obtained at the Secretary of State level and qualifies you to do business. A certificate of authority is a prerequisite to obtaining a debt collection license.
Obtain a Collection Agency Bond
Certain states require that agencies obtain a collection agency bond as part of the licensing process. The collection agency bond is designed primarily to protect the creditor. Collection Agencies typically collect monies on a third party basis and are paid a contingent fee based on the monies actually collected. The collection agency bonds can be “called” in the event the agency collects client monies but fails to remit the appropriate funds. Please note that most underwriters will not write bonds for offshore entities without posting some level of collateral. A collection agency bond is a prerequisite to obtaining a debt collection license.
Obtain a Debt Collection License
Once you have obtained a certificate of authority and a collection agency bond you are ready to apply for a debt collection license in a given state. The information requested in the debt collection license applications vary significantly from state to state but all require some level of corporate information, financial information and personal information on owners and officers of the entity seeking licensure. Certain states require that the collection agency seeking licensure in their state maintain a physical office in their state. The office is setup and maintained for the purpose of debtors who choose to walk-in payments. It is also the physical location the state will use to conduct audits or investigations. The person designated by the agency to serve as the principal contact for the state licensing division in a state that requires a physical office is referred to as the “Resident Manager”. This process can be extremely time-consuming and complex. No two licensing projects are exactly the same but a good benchmark is to allow 120 to 180 days to be fully licensed.