LICENSE REQUIREMENTS

STATE LICENSING REQUIREMENTS FOR COLLECTION AGENCIES

Debt collection licensing can be a confusing subject. While a few states don’t have licensing requirements for debt collectors, most do.

However, requirements across the states are not uniform. Prior to obtaining a license, debt collectors need to determine which states require a license to collect debt as well as any potential licensing exemptions for out-of-state debt collectors and other conditions of licensure, such as trust accounts, bonds and licensing fees.

You’ll need to review state license requirements carefully as certain debt collectors may be exempt. Often, in order to qualify for the out-of-state licensing exemption, debt collectors must not maintain a physical presence in the state and may only collect debts by use of interstate communications, which usually includes telephone, mail or fax.There are three types of collection agencies:

1.) First-Party Agencies. These are oftentimes subsidiaries of the original creditor.

2.) Third-Party Agencies. These are companies which are contracted by the original creditor to collect debts on their behalf for a fee.

3.) Debt Buyers. These companies purchase debts at a percentage of the value and then attempt to collect it from the debtor.

Below is a chart broken down by state to show which states require a license to operate. It is always a good idea to check your state’s government site just to make sure but this a quick reference.

State	License Required	Bond Required	Certificate of Authority	State Filing Fee
AK	Yes	Yes	Yes	$300 – 600
AL	No	No	Yes	N/A
AZ	Yes	Yes	Yes	$1,500
AR	Yes	Yes	Yes	$140
CA	No	No	Yes	N/A
CO	Yes	Yes	Yes	$300
CT	Yes	Yes	Yes	$500 – 900
DC	No	No	No	N/A
DE	No	No	No	N/A
FL	Yes	Yes	Yes	$200 – 500
GA	No	No	No	N/A
HI	Yes	Yes	Yes	$120 – 215
IA	Yes	Yes	Yes	$10
ID	Yes	Yes	Yes	$150
IL	Yes	Yes	Yes	$750
IN	Yes	Yes	Yes	$100
IA	Yes	Yes	Yes	$10
KS	No	No	No	N/A
KY	No	No	No	N/A
LA	Yes	No	Yes	$25
MA	Yes	Yes	Yes	$1,300
MD	Yes	Yes	Yes	$700
ME	Yes	Yes	Yes	$200 – 400
MI	Yes	Yes	Yes	$225
MN	Yes	Yes	Yes	$1,050
MO	No	No	No	N/A
MS	No	No	No	N/A
MT	No	No	No	N/A
NC	Yes	Yes	Yes	$1,000
ND	Yes	Yes	Yes	$700
NE	Yes	Yes	Yes	$400
NH	No	No	No	N/A
NJ	Yes	Yes	Yes	$25
NM	Yes	Yes	Yes	$500
NY	No	No	No	N/A
OH	No	No	No	N/A
OK	No	No	No	N/A
OR	Yes	Yes	Yes	$350
PA	No	No	No	N/A
RI	Yes	No	Yes	$210
SC	No	No	No	N/A
SD	No	No	No	N/A
TN	Yes	Yes	Yes	$150
TX	No	No	No	N/A
UT	Yes	Yes	Yes	$32
VA	No	No	No	N/A
VT	No	No	No	N/A
WA	Yes	Yes	Yes	$340
WI	Yes	Yes	Yes	$1,200
WV	Yes	Yes	Yes	$500

LICENSE REQUIREMENTS

STATE LICENSING REQUIREMENTS FOR COLLECTION AGENCIES

DEBT BUYER REGISTRATION

CONTACT US