Two Minnesota senators introduced a bill Tuesday to add language to the definition of "collector" and "collection agency" that includes debt buyers, a move that would require buyers to become licensed as collectors in the state.
The purpose of Senate Bill 227, introduced by Sen. Ron Latz and Sen. Kevin Dahle, is stated as "expanding the definition of collection agency and collector to include debt buyers for regulatory purposes."
The state's Senate Counsel, in researching the bill, explicitly stated that it would "subject [debt buyers] to regulation as collection agencies under state law. Currently, to be defined as a collection agency the person must be engaged in the business of collection for others."
The term also includes a person who (1) purchases an account, bill, or other indebtedness that was incurred by the debtor for personal, family, or household purposes; and (2) collects the purchased account, bill, or other indebtedness on its own behalf.
If adopted, the new language would force debt buyers to become licensed as collectors in Minnesota at a cost of $500. To become licensed, collectors in Minnesota are required to screen potential employees for criminal backgrounds.