Nevada Proposes New Collection Agency Regulations

The Nevada Financial Institutions Division has proposed regulations regarding collection agencies which amend the Nevada Administrative Code, according to ACA International.

The proposed regulations define a person who purchases an assignment of a claim as a collection agency if: (1) the person purchasing the claim has any obligation to make payments to the seller of the claim after the assignment is made; and (2) the person purchasing the claim seeks to make collection or obtain payment of the claim.

The proposed regulations also provide a foreign collection agency is defined as a person or entity holding a certificate of registration pursuant to applicable Nevada statute and is a citizen of the United States or lawfully entitled to remain and work in the United States. Therefore, foreign collectors that are not U.S. citizens will be unable to obtain a certificate of registration to collect from Nevada residents.

Requirements for adding interest are also provided by the proposed regulations. If a licensee intends to charge interest authorized by state law when the contract underlying the debt is silent as to the intent to charge interest, the licensee must maintain a complete copy of the underlying contract in its files, state clearly in the collection contract with the customer that interest will be collected and how the interest is to be distributed, and disclose to the customer the amount of interest collected on the claim in its written accounting.

Further, the proposed regulations set forth a number of significant fee increases for licensing and foreign registration applications, branch office permits, manager certificates, and investigations. For example, the original license application fee doubled from $300 to $600 under the proposed regulations.

These proposed changes will have a significant impact on debt collectors operating in Nevada, and ACA intends to submit comments to the proposed regulations.

The proposed regulations can be found on the Financial Institutions Division Web site at http://fid.state.nv.us/meetings/2008/2008-11-20_LCB_R_132-08_NAC649.pdf.