Earlier this summer, Minnesota extended many of its collection agency requirements to debt buyers through the enactment of H. F. No. 6. As of January 1, 2022, debt buyers will need to hold a collection agency license or have a licensing application filed with the Minnesota Department of Commerce (Department) in order to “engage in the purchase of any charged-off account, bill, or other indebtedness for collection purposes, whether the business collects the account, bill, or other indebtedness, hires a third party for collection, or hires an attorney for litigation related to the collection.” Information on how to register for a Minnesota collection agency license can be accessed here.
With some exceptions, debt buyers holding a collection agency license will need to ensure their operations conform to the same legal requirements applicable to collection agencies.
As part of the above change, certain companies qualifying as affiliates may operate under one license so long as the licensee files an “Affiliated Company” form, which lists the affiliates that will operate under the license.
To help explain the new requirements and how they impact debt buyers, the Department has issued a Debt Buyer FAQ. Debt buyers conducting business in Minnesota are encouraged to review the changes to assess the impact to their operations and compliance strategies.