A piece of new legislation has just been signed by North Dakota Governor Jack Dalrymple (R) on April 19, 2011. H.B. 1080 makes several significant changes to the licensing, bonding, and branch requirements in North Dakota. This bill will go into effect on August 1, 2011.
This bill removes the exemption previously available to out-of-state debt collectors, thus requiring that out-of-state agencies attempting to collect debt in North Dakota have a collection agency license.
Section 7 of the bill requires a surety bond of $20,000 to be maintained, and that bond must be in a form prescribed by the commissioner. The commissioner may require the filing of a new bond if an action is commenced on the current bond, and immediately upon recovery of any action on the bond, the licensee must file a new bond.
Section 8 requires a minimum net worth of $25,000 to be continuously maintained by every licensee. When reviewing the net worth, the state department will be looking for tangible net worth.
While the North Dakota Department of Banking and Financial Institutions has required/requested written notification of all branch locations for quite some time, an application was only necessary for those branch offices physically located in the state of North Dakota. This is no longer the case. The new law changes the definition of a "branch office" to mean a physical location where collection activity is carried out. This does not include a virtual office - a remote location from which employees can work under the full control and monitoring of the collection agency through telecommunications and computer links. As such, all locations will be required to file a branch licensing application with the North Dakota Department of Banking and Financial Institutions going forward. Please note that a representative of the North Dakota Department of Banking and Financial Institutions has informed Cornerstone that the simplest way to implement the branch licensing for both their Licensees and the Department would be to do so during the 2012 renewal period for current licensees. However, any new application filed after August 1, 2011 would be subject to the branch application and fee amount.
The state anticipates enforcing a $50 branch fee but this has not yet been confirmed.
To see the bill in its entirety, go to http://www.legis.nd.gov/assembly/62-2011/documents/11-8083-04000.pdf.
Should you have any questions or issues concerning this matter or should you wish to engage Cornerstone Support's assistance in obtaining specific state licenses or registrations, contact a Cornerstone Support licensing consultant today at 770-587-4595 or e-mail us at info@cornerstonesupport.com.
THIS INFORMATION IS NOT INTENDED TO BE, NOR IS IT LEGAL ADVICE. IT IS INTENDED FOR INFORMATION PURPOSES ONLY. WE MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR RELIABILITY OF THIS INFORMATION. WE ARE NOT ATTORNEYS.YOU MUST RETAIN YOUR OWN ATTORNEY TO RECEIVE LEGAL ADVICE. WHILE CORNERSTONE STRIVES TO PROVIDE THE MOST CURRENT AND ACCURATE STATE LICENSING INFORMATION, THE RESPONSIBILITY FOR ANY DECISION RELATED TO STATE LICENSING OR AGENCY COMPLIANCE IS SOLELY YOURS.
