Minnesota Establishes Licensing Requirement for Debt Buyers | Man’s pepper with trout
Earlier this summer, Minnesota extended many of its collection agency requirements to debt buyers by enacting HF n ° 6. As of January 1, 2022, debt buyers will need to either hold a collection agency license or file a license application with the Minnesota Department of Commerce (Department) in order to “commit in the purchase of any account, invoice or other debt written off for collection purposes, whether the business collects the account, invoice or any other debt, engages a third party for collection, or engages a lawyer for a collection dispute . “Information on how to register for a Minnesota collection agency license is accessible here.
With few exceptions, debt buyers with a collection agency license will need to ensure their operations comply with the same legal requirements that apply to collection agencies.
As part of the above change, certain qualified affiliate companies may operate under a single license as long as the licensee files a “Affiliate” form, which lists the affiliates that will operate under the license.
To help explain the new requirements and their impact on buyers of debt securities, the Ministry issued a Debt Buyers FAQs. Debt buyers doing business in Minnesota are encouraged to review the changes to assess the impact on their operations and compliance strategies.