State Exempts Licensing Requirement for Passive Debt Buyers

DBA International announced today that through its direct efforts with the State of Maryland Department of Labor, Licensing and Regulation (DLLR), Maryland Commissioner Charles Turnbaugh has issued an exemption from the collection agency licensing requirement for passive debt buyers.

Maryland’s governor signed House Bill 1324 into law on May 8, 2007, which added debt buyers to the definition of a "collection agency." Thereafter, as a direct result of DBA International lobbying efforts, an interpretation was obtained that exempts passive debt buyers from the October 1, 2007 effective date for licensing.

HB 1324 defines a "collection agency" as a "person engaging directly or indirectly in the business of collecting a consumer claim the person owns, if the claim was in default when the person acquired it".

Kelly Mack, the Financial Examiner Lead of the Regulatory Policy Unit stated, “It is the position of the Commissioner that a debt buyer who purchases debt, is not required to obtain a collection agency license provided that all collection activity performed on behalf of such debt buyers is done by a properly licensed collection agency in the State of Maryland.”

Those active debt buyers without a license after the bill goes into effect will be allowed to continue to operate if their license application is approved within 30 days. The projected cost of a license would be a $400 fee and a $5,000 surety bond.