Amendment #350 to H4789

Debt Collection Licensure

Mr. Chan of Quincy moves to amend the bill by adding the following 4 sections:

SECTION X. Section 24 of chapter 93 of the General Laws, as appearing in the 2022 Official Edition, is hereby amended by striking out the definition of “Debt collector” and inserting in place thereof the following definition:-

''Debt collector'', any person who: (i) uses an instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of a debt; (ii) regularly collects or attempts to collect, directly or indirectly, a debt owed or due or asserted to be owed or due another; or (iii) engages in any business the principal purpose of which is the purchase of charged-off debt for collection purposes in the commonwealth, whether it collects the debt itself, hires a third party for collection, or retains an attorney in order to collect such debt. Notwithstanding this definition, a person who purchases charged-off debt as an investment and exclusively contracts with a licensed debt collector or attorney for the collection of the debt who has filed an application with the commissioner for a license and whose application remains pending with the commissioner thereafter may continue to operate without a license until the commissioner approves or denies the application. Notwithstanding the exclusion provided by clause (f), debt collector shall include a creditor who, in the process of collecting his own debt, uses any name other than his own which would indicate that a third person is collecting or attempting to collect the debt. Debt collector shall also include a person who uses an instrumentality of interstate commerce or the mails in a business the principal purpose of which is the enforcement of security interests. Debt collector shall not include:

(a) an officer or employee of a creditor while, in the name of the creditor, collecting debts for the creditor;

(b) a person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for a person to whom it is so related or affiliated and if the principal business of the person is not the collection of a debt;

(c) an officer or employee of the United States or a state of the United States to the extent that collecting or attempting to collect a debt is in the performance of his official duty;

(d) a person while serving or attempting to serve legal process on another person in connection with the judicial enforcement of a debt;

(e) a nonprofit organization which, at the request of a consumer, performs bona fide consumer credit counseling and assists the consumer in the liquidation of debts by receiving payments from the consumer and distributing the amounts to creditors;

(f) a person collecting or attempting to collect a debt owed or due or asserted to be owed or due another to the extent the activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by the person; (iii) concerns a debt which was not in default at the time it was obtained by the person; or (iv) concerns a debt obtained by the person as a secured party in a commercial credit transaction involving the creditor;

(g) attorneys-at-law collecting a debt on behalf of a client; and

(h) an agent or independent contractor employed for the purpose of collecting a charge or bill owed by a tenant to a landlord or owed by a customer to a corporation subject to the supervision of the department of public utilities, the department of telecommunications and cable, or the division of insurance insofar as the person collects charges or bills only for the landlord or supervised corporations.

SECTION XX. Section 24A of said chapter 93 is hereby amended by inserting at end of subsection (a) the following sentence:-  Bonds shall not be required of any person who engages in any business the principal purpose of which is the purchase of charged-off debt for collection purposes and does not otherwise act as a third party debt collector.

SECTION XXX. Section 24B of said chapter 93 is hereby amended by inserting at the end thereof the following subsection:-

(d) The commissioner shall permit affiliated companies to be under a single license and subject to a single examination as long as all of the affiliated company names are listed on the license. The commissioner shall promulgate regulations to define what constitutes an “affiliated company”.             

SECTION XXXX. Sections X through XXX shall not affect the validity of any collection actions taken, civil actions or arbitrations commenced, or judgments entered prior to the effective date of this act.