Which states have debt collector licensing requirement?

Question

I was just researching WA for debt collector license requirements and found the article linked below, summary sez:

" Who Is a Debt Collector Under Washington Law?
The definition of a debt collector under the Washington collection agency law is similar to the FDCPA’s definition. Those who are in the business of collecting debts on others’ behalf are covered, but original creditors are not. The following do not need to be licensed.

Original creditors. Original creditors and other creditors who do not regularly collect debts are not required to be licensed in Washington. For example, a small business does not need to comply with the Washington collection agency law when the its owner contacts you regarding a debt (assuming it is not in the debt collection business, of course). Similarly, financial institutions, realtors, and your landlord do not need to be licensed. "

https://www.nolo.com/legal-encyclopedia/washington-collection-agencies-law.html

What other states require a license for those of us who are NOT collecting on other's behalf?

Brandon L. · Answer

@Bob Malecki I am not positive but it is more likely than not if you are collecting a debt owed to you, you will not need a license or be subject to FDCPA

Jay Hinrichs · Answer

Also Bob when we were shopping for a note servicing company for a performing note product.. we found that many servicers were stationed in Washington.. we ended up with zimple money..   I had to imagine WA laws had something to do with that. And so I think we referred over 1000 plus notes to them and they are scattered around the country of course.  But I think this is more of just a note collection type company not a full blown owner occ servicer type company..

Bob Malecki · Answer

@Jay Hinrichs we use FCI who is licensed in every state for servicing

@Chad Urbshott I checked and OH is appears it is not required: https://www.collectionlicenses.com/ohio-collection-licensing/

Jay Hinrichs · Answer

NMLS is a license registry of state license mortgage originators.. for instance I am one  a mortgage banker so I am registered even though I am not active.. but I believe you need a state license to then get federally registered..  And that site is the most unfriendly un workable site on the planet.. LOL..  I think debt collection maybe something different than mortgage origination etc.. there are only 12 states that I know of that require licenses for commercial purpose loans. Oregon being one  CA  NV etc.. WA its not required but I understand those in the NPN business are buying predominantly owner occ notes.   So maybe there is something buried on that site.

When I toyed with if I wanted to jump into the NPN space.. I know some of the sellers required us to be licensed servicers which I suspect meant licensed debt collectors  before they would sell us any of those type of notes.. ???  But like all things real estate and real estate paper wise I suspect its very state specific..

Jamie Bateman · Answer

I know this isn't a direct answer to your question but I was pointed to this site (I believe by @Chris Seveney):

https://nationwidelicensingsystem.org/slr/Pages/de...

Bob Malecki · Answer

Interesting @Jamie Bateman, unfortunately no continuity on classifications from state to state, but still a handy resource!

Chris Seveney · Answer

@Bob Malecki

Note investors need the license based on my conversion with the states division of financial institutions. They consider a company who buys the same as a company that originates and not only do you need the license but you are next exempt from the 3 year MLO operations manager.

Top of page 3 notes “anyone engaged in mortgage business”.

https://www.com.ohio.gov/documents/fiin_HB199guidance.pdf

Bob Malecki · Answer

Hi All, below are the key provisions for the OH Residential Mortgage Lending                          Act Certificate of Registration. I bolded the phrase which seems to fit our end of the business, "Any entity created solely for the purpose of securitizing loans secured by an interest in real estate, provide the entity does not service the loans" which would be exempt. Since we service with FCI, would this imply that my company is not required to have the licence?
Who Is Required to Have This License?

This registration is required for non-exempt persons engaging in mortgage lending, mortgage brokering, or

mortgage servicing as defined in O.R.C. Chapter 1322.

Who is NOT Required to Have This License?

·Any entity chartered and lawfully doing business under the authority of any law of this state,another state, or the United States as a bank, savings bank, trust company, savings and loan association, or credit union, or a subsidiary of any such entity, which subsidiary is regulated by a federal banking agency and is owned and controlled by a depository institution

• ·A consumer reporting agency that is in substantial compliance with the "Fair Credit Reporting Act"
• ·Any political subdivision, or any governmental or other public entity, corporation, instrumentality, or
• agency, in or of the United States or any state
• ·A college or university, or controlled entity of a college or university, as those terms are defined in
• section 1713.05 of the Revised Code
• ·Any entity created solely for the purpose of securitizing loans secured by an interest in real estate, provide the entity does not service the loans
• ·A Credit Union Service Organization holding a valid Letter of Exemption issued under O.R.C. 1322.05

See O.R.C. 1322.04 for additional exemptions and exclusions and more details.

Activities Authorized Under This License

This license authorizes the following activities...

oFirst mortgage brokering

oSecond mortgage brokering

oFirst mortgage lending

oSecond mortgage lending

oFirst mortgage servicing

Chris Seveney · Answer

@Chad Urbshott

Maryland you actually did not need it but people were in panic mode about it because of one lawsuit. During the period everyone was in panic mode I foreclosed on 4 properties. I did get mine in Maryland because sooner rather than later you will need one as it is being discussed in State government and they are fine tuning some bills regarding it.

Chad U. · Answer

I think this is one of the most misunderstood aspects of the business.  From my knowledge, the following states require it:   GA, KY, IL.   MD did and then it didn't.  OH recently changed their laws and now many believe it's required.

Which states have debt collector licensing requirement?

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