HOUSE BILL NO. 451
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H0451aa.........................................................by BUSINESS
COLLECTION AGENCIES - Amends, adds to and repeals existing law to revise
definitions; to revise activities that require a license; to provide that
licensees maintain a licensed home office; to provide for a license
application and fees; to provide for the director's approval of license
applications; to provide for the denial of license applications or the
suspension or revocation of a license; to revise powers of the director of
the Department of Finance; to delete provisions relating to permits and
applications; to provide requirements for collection agency contracts; to
revise provisions requiring open, fair and honest dealings; to revise
filing of a bond; to revise alternate bonding; to revise trust accounts; to
provide for investigations and examinations of licensees; to revise
violations and penalties; to revise exemptions; to revise civil penalties;
and to provide that the director may issue orders.
02/01 House intro - 1st rdg - to printing
02/04 Rpt prt - to Bus
03/06 Rpt out - to Gen Ord
03/11 Rpt out amen - to engros
03/12 Rpt engros - 1st rdg - to 2nd rdg as amen
03/13 2nd rdg - to 3rd rdg as amen
03/14 3rd rdg as amen - PASSED - 64-4-2
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon,
Chavez, Chew, Clark, Collins, Crane, Eskridge, Hagedorn, Hart,
Harwood, Henderson, Jaquet, Killen, King, Kren, Labrador, Lake,
Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer, Moyle,
Nielsen, Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Roberts,
Ruchti, Rusche, Sayler, Schaefer, Shepherd(02), Shepherd(08),
Shirley, Shively, Smith(30), Smith(24), Snodgrass, Stevenson, Thayn,
Thomas, Vander Woude, Wood(27), Wood(35), Mr. Speaker
NAYS -- Durst, LeFavour, Ringo, Trail
Absent and excused -- Henbest, Wills
Floor Sponsor - Rusche
Title apvd - to Senate
03/17 Senate intro - 1st rdg - to Com/HuRes
03/24 Rpt out - rec d/p - to 2nd rdg
03/25 2nd rdg - to 3rd rdg
03/26 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon(Gannon),
Geddes, Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough,
Langhorst, Little, Lodge, Malepeai(Sagness), McGee, McKague,
McKenzie, Pearce, Richardson, Schroeder, Siddoway, Stegner, Stennett,
Werk
NAYS -- None
Absent and excused -- None
Floor Sponsor - Andreason
Title apvd - to House
03/26 To enrol - Rpt enrol - Sp signed
03/27 Pres signed
03/28 To Governor
04/01 Governor signed
Session Law Chapter 347
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 451
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO COLLECTION AGENCY ACT; AMENDING SECTION 26-2222, IDAHO
3 CODE, TO REVISE AND ADD DEFINITIONS; AMENDING SECTION 26-2223, IDAHO CODE,
4 TO PROVIDE CORRECT TERMINOLOGY, TO REVISE CREDIT REPAIR ACTIVITIES REQUIR-
5 ING A LICENSE, AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
6 26-2223A, IDAHO CODE, TO MAKE TECHNICAL CORRECTIONS, TO REQUIRE THAT
7 LICENSEES MAINTAIN A LICENSED HOME OFFICE AS A PRINCIPAL LOCATION FOR COL-
8 LECTION ACTIVITIES AND TO REVISE PROVISIONS FOR A DESIGNATED RESPONSIBLE
9 PERSON; AMENDING SECTION 26-2224, IDAHO CODE, TO REVISE LICENSE APPLICA-
10 TION REQUIREMENTS; REPEALING SECTION 26-2225, IDAHO CODE, RELATING TO
11 INFORMATION AND MATERIALS REQUIRED WITH APPLICATION, EXAMINATION FEE AND
12 CONSENT TO SERVICE; AMENDING CHAPTER 22, TITLE 26, IDAHO CODE, BY THE
13 ADDITION OF A NEW SECTION 26-2225, IDAHO CODE, TO PROVIDE FOR THE
14 DIRECTOR'S APPROVAL OF LICENSE APPLICATIONS; AMENDING CHAPTER 22, TITLE
15 26, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 26-2227, IDAHO CODE, TO
16 PROVIDE FOR THE DENIAL OF LICENSE APPLICATIONS OR THE SUSPENSION OR REVO-
17 CATION OF A LICENSE; AMENDING SECTION 26-2228, IDAHO CODE, TO REVISE
18 POWERS OF THE DIRECTOR OF THE DEPARTMENT OF FINANCE; AMENDING SECTION
19 26-2229, IDAHO CODE, TO DELETE PROVISIONS PROVIDING FOR PERMITS AND APPLI-
20 CATIONS AND TO REVISE REQUIREMENTS FOR COLLECTION AGENCY CONTRACTS; AMEND-
21 ING SECTION 26-2229A, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY, TO
22 REVISE PROVISIONS REQUIRING OPEN, FAIR AND HONEST DEALINGS, TO MAKE TECH-
23 NICAL CHANGES AND TO PROHIBIT CERTAIN PRACTICES; AMENDING SECTION 26-2230,
24 IDAHO CODE, TO REVISE PROVISIONS FOR REGISTRATION OF ADDITIONAL PLACES OF
25 BUSINESS AND TO DELETE PROVISIONS PERMITTING LIMITED COLLECTION ACTIVITIES
26 AT CERTAIN LOCATIONS; AMENDING SECTION 26-2231, IDAHO CODE, TO PROVIDE FOR
27 LICENSE RENEWAL AND TO ESTABLISH A FEE; AMENDING SECTION 26-2232, IDAHO
28 CODE, TO MAKE TECHNICAL CORRECTIONS, TO PROVIDE CORRECT TERMINOLOGY, TO
29 REVISE PROVISIONS FOR FILING A BOND AND TO DELETE A REQUIREMENT RELATING
30 TO INDEMNIFICATION OF THE DEPARTMENT; REPEALING SECTION 26-2232A, IDAHO
31 CODE, RELATING TO ALTERNATE BONDING; AMENDING CHAPTER 22, TITLE 26, IDAHO
32 CODE, BY THE ADDITION OF A NEW SECTION 26-2232A, IDAHO CODE, TO PROVIDE
33 BONDING REQUIREMENTS FOR DEBT COUNSELORS, CREDIT COUNSELORS AND CREDIT
34 ORGANIZATIONS; AMENDING SECTION 26-2233, IDAHO CODE, TO PROVIDE CORRECT
35 TERMINOLOGY AND TO REVISE PROVISIONS REQUIRING TRUST ACCOUNTS; AMENDING
36 SECTION 26-2234, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY, TO MAKE TECH-
37 NICAL CORRECTIONS, TO REVISE PROVISIONS RELATING TO INVESTIGATION AND
38 EXAMINATION OF LICENSEES, TO REVISE PROVISIONS FOR RECORDKEEPING, TO PRO-
39 VIDE FOR REMITTANCE OF FUNDS AND TO REVISE PROVISIONS AUTHORIZING THE
40 DIRECTOR TO IMPOUND ACCOUNTS OF A LICENSEE; REPEALING SECTION 26-2235,
41 IDAHO CODE, RELATING TO DENIAL, SUSPENSION AND REVOCATION OF PERMIT;
42 AMENDING SECTION 26-2236, IDAHO CODE, TO REVISE PROVISIONS RELATING TO
43 SUBPOENAS, TO PROVIDE CORRECT TERMINOLOGY AND TO MAKE TECHNICAL CORREC-
44 TIONS; AMENDING SECTION 26-2237, IDAHO CODE, TO PROVIDE CORRECT TERMINOL-
45 OGY; AMENDING SECTION 26-2238, IDAHO CODE, TO MAKE TECHNICAL CORRECTIONS
46 AND TO REVISE PROVISIONS FOR VIOLATIONS AND PENALTIES; AMENDING SECTION
2
1 26-2239, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY AND TO REVISE PROVI-
2 SIONS RELATING TO EXEMPTIONS; AMENDING SECTION 26-2240, IDAHO CODE, TO
3 PROVIDE CORRECT TERMINOLOGY AND TO REVISE PROVISIONS FOR IDENTIFYING
4 AGENTS AND FOR FEES; AMENDING SECTION 26-2243, IDAHO CODE, TO PROVIDE COR-
5 RECT TERMINOLOGY; AMENDING SECTION 26-2244, IDAHO CODE, TO PROVIDE CORRECT
6 TERMINOLOGY, TO REVISE PROVISIONS FOR CEASE AND DESIST ORDERS AND TO
7 REVISE CIVIL PENALTIES; AMENDING SECTION 26-2245, IDAHO CODE, TO PROVIDE
8 CORRECT TERMINOLOGY, TO MAKE TECHNICAL CORRECTIONS AND TO REVISE CIVIL
9 PENALTIES; REPEALING SECTION 26-2246, IDAHO CODE, RELATING TO DISCONTINU-
10 ANCE OF OPERATIONS; AMENDING CHAPTER 22, TITLE 26, IDAHO CODE, BY THE
11 ADDITION OF A NEW SECTION 26-2246, IDAHO CODE, TO PROVIDE REQUIREMENTS FOR
12 COLLECTION AGENCY CLOSURE OR DISCONTINUANCE OF OPERATIONS; AMENDING SEC-
13 TION 26-2248, IDAHO CODE, TO MAKE TECHNICAL CORRECTIONS AND TO PROVIDE
14 THAT THE DIRECTOR MAY ISSUE ORDERS; REPEALING SECTION 26-2250, IDAHO CODE,
15 RELATING TO FOREIGN PERMITTEES AND SECTION 26-2251, IDAHO CODE, RELATING
16 TO CANCELLATION OF PERMITS; AMENDING CHAPTER 22, TITLE 26, IDAHO CODE, BY
17 THE ADDITION OF A NEW SECTION 26-2251, IDAHO CODE, TO PROVIDE SEVERABIL-
18 ITY; AND AMENDING SECTION 1-2301A, IDAHO CODE, TO PROVIDE CORRECT TERMI-
19 NOLOGY AND TO PROVIDE A CORRECT CODE REFERENCE.
20 Be It Enacted by the Legislature of the State of Idaho:
21 SECTION 1. That Section 26-2222, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 26-2222. DEFINITIONS. As used in this chapter act:
24 (1) "Agent" means any person who, is compensated on a commission basis or
25 by salary, or both, by any permittee and who either for compensation or gain,
26 or in the expectation of compensation or gain, contacts debtors or creditors
27 persons in Idaho in connection with the collection agency business activities
28 of the permittee a licensee or person required to be licensed under this act.
29 (2) "Business funds" means all moneys belonging to or due the permittee a
30 licensee or person required to be licensed in connection with the operation of
31 a collection agency business activities authorized under this act.
32 (3) "Collection activities" means the activities enumerated in subsec-
33 tions (2) through (6) of section 26-2223, Idaho Code.
34 (4) "Collection agency," "collection bureau" or "collection office" shall
35 be means a person who engages in any of the activities enumerated in subsec-
36 tions (2) through (6) of section 26-2223, Idaho Code.
37 (4) "Director" means the director of the department of finance.
38 (5) "Credit repair organization" means any person engaged in any of the
39 activities enumerated in subsection (8) of section 26-2223, Idaho Code.
40 (56) "Creditor" means any person who transfers to a permittee accounts
41 due and owing for collection purposes offers or extends credit creating a debt
42 or to whom a debt is owed.
43 (7) "Creditor client" means any person who transfers or assigns to a col-
44 lection agency licensee or person required to be so licensed under this act,
45 any account, bill, claim or other indebtedness for collection purposes.
46 (68) "Creditors' account "Creditor funds" means all funds due and owing a
47 creditor within the definition of this chapter by a licensee or person
48 required to be licensed under this act.
49 (9) "Debt counselor" or "credit counselor" means any person engaged in
50 any of the activities enumerated in subsection (7) of section 26-2223, Idaho
51 Code.
52 (10) "Department" means the Idaho department of finance.
3
1 (11) "Director" means the director of the Idaho department of finance.
2 (12) "Licensee" means a person who has obtained a license under this act.
3 (713) "Net collections" means all funds that are due to creditors from the
4 permittee licensee pursuant to the contract between the permittee licensee and
5 creditor, or permittee licensee and debtor without taking into account any
6 offset or funds due from the creditor to the permittee licensee, because of
7 the creditor having collected any part of the account due, plus all funds that
8 the permittee licensee agreed to return to debtors or that were not to be
9 applied to debts.
10 (8) "Permittee" means a person who has a permit to do business as a col-
11 lection agency, or debt counselor, or credit counselor in Idaho.
12 (914) "Person" means any permittee, agent, solicitor, individual, corpora-
13 tion, association, copartnership partnership, limited liability partnership,
14 trust, company, limited liability company, or unincorporated organization
15 association.
16 (10) "Debt counselor" means any person engaged in any of the activities
17 enumerated in subsection (6) of section 26-2223, Idaho Code.
18 (11) "Credit counselor" means any person engaged in any of the activities
19 enumerated in subsection (6) or (7) of section 26-2223, Idaho Code. No credit
20 counselor shall be granted a permit pursuant to this chapter unless qualified
21 as an exempt organization under section 501(c)(3) of the Internal Revenue
22 Code.
23 SECTION 2. That Section 26-2223, Idaho Code, be, and the same is hereby
24 amended to read as follows:
25 26-2223. COLLECTION AGENCY, DEBT COUNSELOR, OR CREDIT COUNSELOR, PERMITS
26 OR CREDIT REPAIR ORGANIZATION -- LICENSE REQUIRED. No person shall without
27 complying with the terms of this chapter act and obtaining a permit license
28 from the director:
29 (1) Operate as a collection agency, collection bureau, collection office,
30 debt counselor, or credit counselor, or credit repair organization in this
31 state.
32 (2) Engage, either directly or indirectly, in this state in the business
33 of collecting or receiving payment for others of any account, bill, claim or
34 other indebtedness.
35 (3) Solicit or advertise for the right in this state to collect or
36 receive payment for another of any account, bill, claim or other indebtedness.
37 (4) Sell or otherwise distribute in this state any system or systems of
38 collection letters and or similar printed matter where the name of any person
39 other than the particular creditor to whom the debt is owed appears.
40 (5) Engage in any activity in this state which indicates, directly or
41 indirectly, that a third party is or may be involved in effecting any collec-
42 tions.
43 (6) Engage or offer to engage in this state, directly or indirectly, in
44 the business of collecting any form of indebtedness for that person's own
45 account if the indebtedness was acquired from another person and if the
46 indebtedness was either delinquent or in default at the time it was acquired.
47 (7) Engage or offer to engage in this state in the business of receiving
48 money from debtors for application to or payment of to or prorating of a debt
49 owed to, any creditor or creditors of such debtor., or
50 (7) Eengage or offer to engage in this state in the business of providing
51 counseling or other services to debtors in the management of their debts, and
52 or contracting with the debtor to effect the adjustment, compromise, or dis-
53 charge of any account, note or other indebtedness of the debtor.
4
1 (8) Engage or offer to engage in this state in the business of credit
2 repair which includes obtaining, for others, improvements in credit records,
3 extensions of credit for clients, or causing the removal of documents from the
4 credit records of a client maintained by a credit reporting agency.
5 (9) Engage or offer to engage in this state, directly or indirectly, in
6 the business of collecting any form of indebtedness for that person's own
7 account if the indebtedness was acquired from another person and if the
8 indebtedness was either delinquent or in default at the time it was acquired
9 selling, providing or performing services to improve any consumer's credit
10 record, credit history or credit rating, or providing advice or assistance to
11 any consumer with regard to his credit record, credit history or credit
12 rating.
13 SECTION 3. That Section 26-2223A, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 26-2223A. OFFICE TO BE MAINTAINED IN STATE COLLECTION AGENCY OFFICE
16 REQUIREMENTS -- DESIGNATION OF RESPONSIBLE PERSON. Every permittee under this
17 chapter must maintain an office in the state of Idaho, staffed with at least
18 one (1) natural person who passed the examination required in section 26-2229,
19 Idaho Code, or is exempt from the provisions of this chapter pursuant to sec-
20 tion 26-2239(1), Idaho Code, at each branch or facility.
21 (1) Each permittee licensee shall maintain a home office licensed under
22 this act as the licensee's principal location for collection activities. Each
23 licensee must have maintain a listed Idaho telephone number and must be open
24 to the public during normal business hours on each business day, provided,
25 however, that the director may in his discretion approve a request for opening
26 at during hours other than normal business hours or a portion of a business
27 day. A business day within the meaning of this section does not include Satur-
28 days, Sundays, or legal holidays.
29 (2) Each permittee under this chapter must licensee shall designate a
30 natural person, who need not be a resident of the state of Idaho meets the
31 experience requirement of section 26-2224(6), Idaho Code, to be responsible
32 for the business collection activities carried on at the each office and who
33 has passed the examination for a permit required by section 26-2229, Idaho
34 Code of the licensee. If the person designated by the permittee to be respon-
35 sible for business carried on at the office licensee for such purpose is not
36 normally available in at the Idaho office licensee's designated location,
37 then the permittee's licensee's collection activities with debtors in Idaho
38 must begin with a written notice to each debtor setting forth a mailing
39 address and a toll-free telephone number whereby a debtor may contact the des-
40 ignated responsible person during normal business hours.
41 SECTION 4. That Section 26-2224, Idaho Code, be, and the same is hereby
42 amended to read as follows:
43 26-2224. FORM OF LICENSE APPLICATION. Every applicant for such permit a
44 license under this act shall file in the department of finance with the direc-
45 tor an application in a form to be prescribed by the director setting forth
46 that shall include:
47 (1) The name of the applicant; if an individual; if the applicant is a
48 corporation, a list of its officers and directors and their addresses; if the
49 applicant is a partnership, a list of the partners and their addresses; or if
50 the applicant is a limited liability company, a list of its members or man-
51 agers and their addresses. Every corporation shall designate and appoint one
5
1 (1) or more of its officers or employees, every partnership shall designate
2 and appoint one (1) or more of its partners, and every limited liability com-
3 pany shall designate and appoint one (1) or more of its members or managers
4 who shall submit to the examination hereinafter required. No permit shall be
5 issued to any corporation, partnership or limited liability company unless and
6 until the persons so designated shall submit to and pass the examination
7 required by this chapter.
8 (2) The street address of the applicant's principal location. of the
9 principal office or place of business of the applicant.
10 (3) Other All names, if any, by which the applicant conducts, engages in
11 or solicits business collection activities.
12 (4) The names of all persons and organizations with which the applicant
13 is affiliated, in such business, and the location of the principal office or
14 place of business of each such affiliation affiliate.
15 (5) A complete description of the business to be conducted, or plan of
16 operation contemplated, by the applicant in this state.
17 (6) The name, address and qualifications of a natural person possessing a
18 minimum of three (3) years of experience related to the business to be con-
19 ducted under this act who will supervise the applicant's office locations from
20 which business activities in this state will be conducted.
21 (7) A list Copies of all papers and filings contracts, forms, form let-
22 ters, and advertisements or solicitations to be used by the applicant in its
23 business activities under this act, which must accompany the application and
24 be identified as exhibits by number.
25 (7) A financial statement showing the applicant to have a financial net
26 worth of not less than two thousand five hundred dollars ($2,500), which
27 statement shall be subject to disclosure according to chapter 3, title 9,
28 Idaho Code. The financial statement shall specify assets and liabilities, pro-
29 viding detailed reference to each item listed to inform the director of the
30 nature and extent of such assets and liabilities. This financial statement
31 shall be signed by the applicant or its proper agent. The net worth shall not
32 include any notes, accounts, bills, and judgments held for collection by the
33 applicant nor shall it include good will or other assets the value of which is
34 speculative and not susceptible to prompt liquidation.
35 (8) If the applicant is a corporation, a limited liability company, part-
36 nership, or limited liability partnership, a copy of its articles of incorpo-
37 ration, articles of organization, partnership agreement, or operating agree-
38 ment, duly authenticated.
39 (9) A list of the names, business addresses and telephone numbers of all
40 agents who will contact persons or solicit business for the applicant in this
41 state.
42 (10) The name and business address of the applicant's agent for service of
43 process located in this state.
44 (11) A nonrefundable application fee of one hundred fifty dollars ($150).
45 (12) An agreement of consent authorizing the director to examine any and
46 all of the applicant's financial accounts used for business activities under
47 this act.
48 (813) Such other information concerning the applicant's business as the
49 director may reasonably require. Such application shall be executed and veri-
50 fied by the by the applicant or applicants personally, or by an individual
51 associated with the applicant as designated by the director on oath by the
52 applicant. Information required at the time of application, except for adver-
53 tisements and solicitations, shall be updated and filed with the director as
54 necessary to keep the information current.
6
1 SECTION 5. That Section 26-2225, Idaho Code, be, and the same is hereby
2 repealed.
3 SECTION 6. That Chapter 22, Title 26, Idaho Code, be, and the same is
4 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
5 ignated as Section 26-2225, Idaho Code, and to read as follows:
6 26-2225. APPROVAL OF LICENSE APPLICATION. (1) The director shall act upon
7 all applications for a license under this act. If the director determines that
8 the requirements of this act have been met and all applicable fees paid, and
9 the applicant is not otherwise unqualified for licensure, the director shall
10 issue a license to the applicant.
11 (2) Each license issued under this section shall remain in full force and
12 effect unless the licensee fails to satisfy the renewal requirements of this
13 act, or the license is relinquished, suspended, terminated or revoked.
14 SECTION 7. That Chapter 22, Title 26, Idaho Code, be, and the same is
15 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
16 ignated as Section 26-2227, Idaho Code, and to read as follows:
17 26-2227. DENIAL, SUSPENSION OR REVOCATION OF LICENSE. (1) An application
18 for a license may be denied or, after notice and the opportunity for a hear-
19 ing, a license may be suspended or revoked by the director if he finds that
20 facts or conditions exist which would have justified the director in refusing
21 to grant a license had such facts or conditions been known to exist at the
22 time the license was issued, or that the licensee or the applicant, or any
23 officer, member, owner, manager or agent of a licensee or applicant:
24 (a) Has violated any provision of this act, the federal fair debt collec-
25 tion practices act, 15 U.S.C. section 1692, et seq., as amended, or any
26 rule or order of the director under this act;
27 (b) Is not legally qualified to do business in this state;
28 (c) Has failed to retain a natural person with three (3) years of experi-
29 ence related to the type of business conducted by the licensee under this
30 act to supervise each office from which business activities are conducted
31 under this act;
32 (d) Has failed, refused or neglected to pay or remit to any creditor cli-
33 ent the agreed portion of any sum collected by the applicant or licensee
34 on any bill, claim, account or other indebtedness entrusted to such appli-
35 cant or licensee for collection;
36 (e) Has failed to return to a debtor an amount that was not owed on his
37 debt;
38 (f) Has made a material misstatement in the application for such license
39 or renewal;
40 (g) Has obtained or attempted to obtain a license or renewal by fraud or
41 misrepresentation;
42 (h) Has misappropriated or converted to his own use or improperly with-
43 held moneys collected or held for any other person, except that a collec-
44 tion agency licensee may convert into business funds his portion of any
45 moneys collected on behalf of a creditor client, pursuant to a written
46 agreement with the creditor client and in compliance with this act;
47 (i) Has falsely represented himself as a licensee for the purpose of
48 soliciting for or representing any business covered in this act;
49 (j) Has been convicted of, or a court of competent jurisdiction has
50 entered a withheld judgment for any felony, or for a misdemeanor involving
51 financial wrongdoing or moral turpitude;
7
1 (k) Has had a license substantially equivalent to a license under this
2 act issued by another state revoked, suspended or denied; or
3 (l) Demonstrates a lack of fitness to engage in business activities
4 authorized for a licensee under this act.
5 (2) The director may, after notice and the opportunity for a hearing,
6 impose upon any licensee, or person required to be licensed under this act, a
7 civil penalty of not more than five thousand dollars ($5,000) for each viola-
8 tion of this act.
9 (3) The director may, after notice and the opportunity for a hearing,
10 impose upon a licensee, or person required to be licensed under this act, any
11 sanction authorized by this section if the director finds that an agent of the
12 licensee, or person required to be licensed under this act, has violated any
13 provision of this act.
14 (4) The director may, in his discretion, and by an order issued in accor-
15 dance with chapter 52, title 67, Idaho Code, prohibit a licensee from using an
16 individual as an agent if the individual has violated any provision of this
17 act, or any similar statute or rule of another state.
18 (5) Any denial, suspension or revocation of any license issued under this
19 act shall be governed by chapter 52, title 67, Idaho Code.
20 SECTION 8. That Section 26-2228, Idaho Code, be, and the same is hereby
21 amended to read as follows:
22 26-2228. POWERS OF THE DIRECTOR. The director shall have the power to
23 provide the manner and method for conducting examinations. Applications for
24 examination shall be filed with the director at least ten (10) days prior to
25 the examination date.
26 The examination shall be uniformly given, may be written or oral or a com-
27 bination of both and shall be practical in nature. The examination may include
28 questions on bookkeeping, credit adjusting, business law, collection proce-
29 dure, business ethics, agency, debtor and creditor relationship, trust funds,
30 creditors' funds, business funds, fiduciary relationships, and the provisions
31 of this act and the rules duly issued by the director pursuant to this act,
32 and such other subject matter as the director by rule may specify. The exami-
33 nation shall be given twice each year or at such more frequent intervals as
34 the director may direct In addition to any other duties authorized by law, the
35 director shall:
36 (1) Administer and enforce the provisions and requirements of this act;
37 (2) Conduct investigations and issue subpoenas as necessary to determine
38 whether a person has violated any provision of this act, rule or order hereun-
39 der;
40 (3) Conduct examinations of the books and records of licensees related to
41 business activities authorized under this act and conduct investigations as
42 necessary and proper for the enforcement of the provisions of this act, rules
43 or orders hereunder;
44 (4) Pursuant to chapter 52, title 67, Idaho Code, issue orders and pro-
45 mulgate rules that, in the opinion of the director, are necessary to execute,
46 enforce and effectuate the purposes of this act; and
47 (5) Require that all funds collected by the department under this act be
48 deposited into the finance administrative account pursuant to section 67-2702,
49 Idaho Code.
50 SECTION 9. That Section 26-2229, Idaho Code, be, and the same is hereby
51 amended to read as follows:
8
1 26-2229. EXAMINATION -- PERMIT CONTRACTS. (1) The director shall examine
2 each application for a permit and accompanying papers and investigate the
3 qualifications of the applicant and if he finds therefrom that the same are in
4 proper form, that the literature proposed to be circulated does not tend to
5 conceal or misrepresent any fact to the detriment of any person dealing with
6 the applicant, that the contract or contracts proposed to be entered into for
7 the collection or payment or prorating of accounts, bills, claims or other
8 indebtedness by the applicant, or prorating or receiving money for payment to
9 creditors are equitable, fair and reasonable, and that the applicant meets all
10 other requirements and qualifications of this act, he shall examine the appli-
11 cant if an individual, or the designated officer or officers or employees of
12 any corporation and the designated member or members of any partnership, in
13 the manner described in section 26-2225, Idaho Code, and if such applicant or
14 designee passes a satisfactory examination, he shall cause a permit to be
15 issued authorizing the applicant to conduct such a business in this state sub-
16 ject to the provisions of this act, until the fifteenth day of March next
17 thereafter.
18 (2) If the director finds that the applicant does not qualify under the
19 provisions of this act, the application shall be denied. If he finds the
20 applicant is qualified he must issue a permit upon the filing of the bonds
21 required by this act and the payment of an annual permit fee as fixed by the
22 director, but not to exceed fifty dollars ($50), except that no permit fee
23 need be paid by a nonprofit corporation or association conducting credit coun-
24 seling or debt prorating activities.
25 (31) Contracts between collection agency licensees or collection agencies
26 required to be licensed under this act and creditor clients shall be in writ-
27 ing.
28 (2) No It shall be a violation of this act for any collection agency con-
29 tract shall be deemed equitable, fair or reasonable within the meaning of this
30 section which in substance either to:
31 (a) Permits the applicant Authorize a collection agency to retain any
32 sums due the collected on behalf of a creditor on any account, bill, claim
33 or other indebtedness collected for him by the applicant on account of, or
34 as a setoff against, any fee, commission, charge, expense or compensation
35 claimed client, other than the regular collection fees or commissions, to
36 be due from such creditor on any other account whatever.
37 (b) Penalizes the creditor for failure to produce evidence in support of
38 any account, bill, claim or item of indebtedness placed with the applicant
39 for collection in addition to that delivered upon the execution of such
40 contract. authorized by this act;
41 (cb) Penalizes such a creditor client for any unintentional error, mis-
42 take or omission in furnishing to the applicant the correct name or
43 address of any debtor. to a collection agency; or
44 (dc) Stipulates, directly or indirectly, for Require the payment of any
45 fee, commission or compensation in excess of fifty per cent percent (50%)
46 of the amount actually collected on any account, bill, claim or other
47 indebtedness entrusted to the applicant collection agency for collection.,
48 provided, hHowever, that in the case of that a collection agency collects
49 interest collected by a permittee on an account, the creditor client and
50 the permittee by agreement between them collection agency may provide
51 agree in writing for division of such interest between them without such
52 percentage limitation.; and provided further that Furthermore, in the case
53 of the collection of checks dishonored by nonacceptance or nonpayment, the
54 creditor client and the permittee collection agency, by written agreement
55 between them, may provide, in place of a percentage fee, for the payment
9
1 of a set dollar amount collection fee not to exceed the amount provided in
2 section 28-22-105, Idaho Code, which shall not be subject to the fifty per
3 cent percent (50%) limitation. Collection agreements to proceed under sec-
4 tion 1-2301A, Idaho Code, shall be subject to the fifty per cent percent
5 (50%) limitation.
6 (43) A permit holder, engaging in the business of receiving money from
7 debtors for application to or payment or prorating the account or accounts of
8 any creditor or creditors of such debtor, for compensation or otherwise, or in
9 the business of acting as the assignee for the benefit of creditors as a pri-
10 mary or secondary object, No debt counselor, credit counselor or credit repair
11 organization licensed or required to be licensed under this act shall not take
12 or receive for services performed by such permit holder for any one (1) person
13 more than fifteen per cent percent (15%) of the amount received by it at any
14 one (1) time from or on behalf of that person for payment or prorating to
15 creditors, and no other charges shall be made or received for any such ser-
16 vice.
17 SECTION 10. That Section 26-2229A, Idaho Code, be, and the same is hereby
18 amended to read as follows:
19 26-2229A. REQUIREMENT OF FAIR, OPEN AND HONEST DEALING -- PROHIBITED
20 PRACTICES. (1) Every permittee, foreign permittee licensee or person required
21 to be licensed under this act and its agents shall deal openly, fairly, and
22 honestly without deception in the conduct of the collection agency its busi-
23 ness activities in this state under this act.
24 (2) When not inconsistent with the statutes of this state, the provisions
25 of the federal fair debt collection practices act, 15 U.S.C. section 1692, et
26 seq., as amended, may be enforced by the director against agents, permittees
27 and foreign permittees collection agencies licensed or required to be licensed
28 under the provisions of this chapter act.
29 (23) In any and every instance where the permittee a collection agency
30 licensee has a managerial or financial interest in the a creditor client, or
31 where the a creditor client has a managerial or financial interest in the per-
32 mittee a collection agency licensee, disclosure of such interest must be made
33 on each and every contact with a debtor in seeking to make a collection of any
34 account, claim, or other indebtedness. where such interest or relationship
35 exists between creditor and permittee.
36 (34) No permittee, foreign permittee collection agency licensee, or col-
37 lection agency required to be licensed under this act, or agent of such col-
38 lection agency shall collect or attempt to collect any interest or other
39 charges, fees, or expenses incidental to the principal obligation unless such
40 interest or incidental fees, charges, or expenses: are:
41 (a) Are eExpressly authorized by statute;
42 (b) Are aAllowed by court rule ruling against the debtor;
43 (c) Have been judicially determined; or
44 (d) Are provided for in a written form agreement, to be signed by
45 both the debtor and the permittee licensee, and which has the prior
46 approval of the director with respect to the terms of the agreement
47 and amounts of the fees, interest, charges and expenses; or
48 (e) Reasonably relate to the actual cost associated with processing
49 a demand draft or other form of electronic payment on behalf of a
50 debtor for a debt payment, provided that the debtor has preauthorized
51 the method of payment and has been notified in advance that such pay-
52 ment may be made by reasonable alternative means that will not result
53 in additional charges, fees or expenses to the debtor.
10
1 (45) No person shall sell, distribute or make use of solicitations, col-
2 lection letters, demand forms or other printed matter which are made similar
3 to or resemble governmental forms or documents, or legal forms used in civil
4 or criminal proceedings.
5 (56) No person shall use any trade name, address, insignia, picture,
6 emblem or any other means which creates any impression that such person is
7 connected with or is an agency of government.
8 (7) No person licensed, or required to be licensed under this act, shall
9 misappropriate, transfer, or convert to his own use or benefit, funds belong-
10 ing to or held for another person in connection with business activities
11 authorized under this act.
12 (8) No credit repair organization licensed, or required to be licensed
13 under this act, shall charge or receive money or other valuable consideration
14 for the performance of any service which the credit repair organization has
15 agreed to perform for any consumer before such service is fully performed.
16 (9) No person licensed or required to be licensed under this act shall
17 make a representation or statement of material fact, or omit to state a mate-
18 rial fact, in connection with the offer, sale or performance of any service
19 authorized under this act, if the representation, statement or omission is
20 false or misleading or has the tendency or capacity to be misleading.
21 SECTION 11. That Section 26-2230, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 26-2230. BRANCH OFFICES. (1) The director may authorize a permittee, upon
24 request, to conduct collection activities authorized in this chapter at addi-
25 tional locations. The additional A licensee must register, in a manner pre-
26 scribed by the director, each additional place of business from which activi-
27 ties authorized under this act are directly or indirectly conducted in this
28 state. Registered locations shall be considered branches of the permittee
29 licensee. The licensee shall inform the director shall be informed of the
30 opening and closing of all branch locations operated by permittees of a branch
31 location at least thirty (30) days prior thereto, and no later than thirty
32 (30) days after the closing of any branch location.
33 (2) The director may authorize a permittee, upon written request, to con-
34 duct limited collection activities at locations other than the principal loca-
35 tion of the permittee or branches. The facilities may be at the domiciles of
36 the agents employed by the permit holder. Collection activities at facilities
37 shall be limited to telecommunications with creditors, clients, debtors, and
38 the permittee's offices and branches. The director shall be informed of the
39 opening and closing of all facility locations operated by permittees.
40 SECTION 12. That Section 26-2231, Idaho Code, be, and the same is hereby
41 amended to read as follows:
42 26-2231. RENEWAL OF PERMIT LICENSE. Upon application postmarked
43 (1) Oon or before the fifteenth day of March of each year, the holder of
44 any permit issued under the provisions of this chapter each licensee shall be
45 entitled to have such permit renewed for the succeeding calendar year upon
46 payment of the annual permit fee as fixed by the director, but not to exceed
47 fifty dollars ($50.00), compliance with the bond requirements of this chapter,
48 the filing of a financial statement in the form required by section
49 26-2224(7), Idaho Code, showing a net worth of at least two thousand five hun-
50 dred dollars ($2,500) for each place of business for which a permit is sought,
51 filing of all other documents required by section 26-2224, Idaho Code, and
11
1 approval by the director of all literature to be employed by the permittee
2 during the course of the business year, except no annual permit renewal fee
3 need be paid by a nonprofit corporation or association conducting credit coun-
4 seling or debt prorating activities pay to the director a nonrefundable
5 license renewal fee of one hundred dollars ($100) and shall file with the
6 director a license renewal form providing complete information as required by
7 the director.
8 (2) Failure to fully comply with the license renewal requirements of this
9 section by the fifteenth day of March of each year shall result in automatic
10 expiration of the license as of that date.
11 SECTION 13. That Section 26-2232, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 26-2232. COLLECTION AGENCY SURETY BONDS. (1) Upon approval of the appli-
14 cation and prior to the issuance of the permit a license under this act, the
15 applicant must shall file in the department of finance two (2) a surety bonds.
16 Both bonds shall be in a form provided prescribed by the attorney general of
17 this state, and director. The bond shall be executed by the applicant as prin-
18 cipal and by some a surety company authorized to do business in this state, as
19 surety, and shall be for the term of any permit the license issued to the
20 applicant. Each permittee shall be required to have the two (2) bonds for each
21 permit as hereinafter provided. In lieu of the bonds required by this section,
22 a certificate of deposit issued by an a financial institution authorized to
23 conduct business in Idaho bank and made payable to the director may be pro-
24 vided to the director in the same principal amount as required for the bonds.
25 The interest on the certificate of deposit shall be payable to the permittee
26 licensee. The certificate of deposit shall be maintained at all times during
27 which the permittee licensee is authorized to do business under Idaho law, and
28 this act. The certificate of deposit must provide that it will remain in
29 effect for at least three (3) years following discontinuance of operations,
30 unless released earlier by the director when all statutory requirements have
31 been met.
32 (a2) A The surety bond shall be executed to the state of Idaho in the sum
33 of fifteen thousand dollars ($15,000) or upon renewal in such larger sum as
34 hereinafter provided. In any case where a permittee licensee or its represen-
35 tatives has have failed to account for and pay over the proceeds of any col-
36 lection made or money received for payment or prorating to creditors, or has
37 have failed to return to a debtor any sum received that was not to be applied
38 to his debts, the creditor or debtor shall have in addition to all other legal
39 remedies a right of action in his own name on such bond without the necessity
40 of joining the permittee licensee in such action. The bond shall be continuous
41 in form and shall remain in full force and effect for the permit license
42 period. The surety may cancel the bond provided that the surety shall in such
43 event provide the permittee licensee and the director with notice no less than
44 thirty (30) days prior to cancelation cancellation of said bond. Such notice
45 shall be by registered or certified mail with request for a return receipt
46 and addressed to the permittee licensee at its main office and to the direc-
47 tor. In no event shall the liability of the surety for any and all claims
48 against the bond exceed the face amount of such bond.
49 (3) Upon renewal of any permit a license, the permittee licensee shall
50 supply the director with a statement of the preceding year's net collections.
51 The amount of the bond upon renewal shall be in the amount of fifteen thousand
52 dollars ($15,000), or two (2) times the average monthly net collections for
53 the preceding year computed to the next highest one thousand dollars ($1,000),
12
1 whichever sum is greater, up to a maximum of one hundred thousand dollars
2 ($100,000).
3 (b) A bond shall be executed to the state of Idaho in the sum of two
4 thousand dollars ($2,000), which shall be limited to the indemnification of
5 the department of finance for any and all expenses incurred as a result of
6 investigations, administrative proceedings, and prosecutions which shall be
7 instituted by the director against a permittee or licensee pursuant to this
8 act. The bond shall be continuous in form and remain in full force and effect
9 and run concurrently with the permit period and any renewal thereof. The
10 surety may cancel the bond provided that the surety shall in such event pro-
11 vide the permittee and the director with notice thirty (30) days prior to
12 cancelation of said bond. Such notice shall be registered or certified mail
13 with request for a return receipt and addressed to the permittee at its main
14 office and to the director. In no event shall the liability of the surety for
15 any and all claims against the bond exceed the face amount of such bond.
16 SECTION 14. That Section 26-2232A, Idaho Code, be, and the same is hereby
17 repealed.
18 SECTION 15. That Chapter 22, Title 26, Idaho Code, be, and the same is
19 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
20 ignated as Section 26-2232A, Idaho Code, and to read as follows:
21 26-2232A. DEBT COUNSELORS, CREDIT COUNSELORS, CREDIT REPAIR ORGANIZATIONS
22 -- BONDS. (1) Upon approval of the application and prior to the issuance of a
23 license under this act, an applicant for a license as a debt counselor, credit
24 counselor or credit repair organization shall file in the department of
25 finance a surety bond in a form prescribed by the director. The bond shall be
26 executed by the applicant as principal and by a surety company authorized to
27 do business in this state, and shall be for the term of the license issued to
28 the applicant. In lieu of the bond required by this section, a certificate of
29 deposit issued by a financial institution authorized to conduct business in
30 Idaho may be provided to the director in the same principal amount as required
31 for the bond. The interest on the certificate of deposit shall be payable to
32 the licensee. The certificate of deposit shall be maintained at all times dur-
33 ing which the licensee is authorized to do business under this act. The cer-
34 tificate of deposit must provide that it will remain in effect for at least
35 three (3) years following discontinuance of operations, unless released ear-
36 lier by the director when all statutory requirements have been met.
37 (2) The surety bond shall be executed to the state of Idaho in the sum of
38 fifteen thousand dollars ($15,000) or upon renewal in such larger sum as here-
39 inafter provided. In any case where a licensee or its representatives have
40 failed to account for and pay over moneys accepted, received or held for
41 another in the licensee's conduct of business authorized by this act, a person
42 injured thereby shall have, in addition to all other legal remedies, a right
43 of action in his own name on such bond without the necessity of joining the
44 licensee in such action. The bond shall be continuous in form and shall remain
45 in full force and effect for the license period. The surety may cancel the
46 bond provided that the surety shall in such event provide the licensee and the
47 director with notice no less than thirty (30) days prior to cancellation of
48 the bond. Such notice shall be by registered or certified mail with request
49 for a return receipt and addressed to the licensee at its main office and to
50 the director. In no event shall the liability of the surety for any and all
51 claims against the bond exceed the face amount of such bond.
52 (3) Upon renewal of a license, the licensee shall supply the director
13
1 with a statement of the moneys accepted, received or held for another in the
2 licensee's conduct of business authorized by this act. The amount of the bond
3 upon renewal shall be in the amount of fifteen thousand dollars ($15,000), or
4 two (2) times the average monthly amount over the preceding year of moneys
5 accepted, received or held for another in the licensee's conduct of business
6 authorized by this act computed to the next highest one thousand dollars
7 ($1,000), whichever sum is greater, up to a maximum of one hundred thousand
8 dollars ($100,000).
9 SECTION 16. That Section 26-2233, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 26-2233. PERMITTEE LICENSEE ACCOUNTS REQUIRED. A permittee shall in its
12 own name:
13 (1) Every licensee under this act that receives or holds funds belonging
14 to another in connection with the business activities authorized by this act
15 shall, in its own name, eEstablish and maintain a separate trust account for
16 deposit and remittance of creditors' such funds in a financial institution,
17 the deposits of which are insured by the federal deposit insurance corpora-
18 tion. A licensee may not, directly or indirectly, misappropriate, misapply or
19 borrow money held in trust.
20 (2) Every licensee under this act shall eEstablish and maintain a sepa-
21 rate business account for the licensee's business funds and moneys in a finan-
22 cial institution, the deposits of which are insured by the federal deposit
23 insurance corporation.
24 SECTION 17. That Section 26-2234, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 26-2234. EXAMINATIONS, INVESTIGATIONS, RECORDS AND PAYMENT OF FUNDS. (1)
27 The director or his duly authorized representatives may make an annual exami-
28 nation, or more frequently in the director's discretion, of the place of
29 licensee's business of each permittee and foreign permittee locations from
30 which activities authorized under this act are conducted, and for that purpose
31 the director shall have free access during normal business hours to the offi-
32 ces and places of business, and to the books, creditors' accounts, trust
33 accounts, business accounts, records, papers, files, safes and vaults of all
34 such permittees used by a licensee for its operations under this act.
35 (2) The director may, upon his own motion, and shall, upon the sworn com-
36 plaint in writing of any person, investigate the action of any person or per-
37 sons claimed to have violated the provisions of this chapter, and conduct pub-
38 lic or private investigations and examinations within or outside of this state
39 which the director considers necessary or appropriate to determine whether a
40 person has violated, is violating, or is about to violate this act or a rule
41 adopted or order issued under this act, or to aid in the enforcement of this
42 act. Ffor that purpose the director shall have free access during normal busi-
43 ness hours to the offices and places of business, and to the books, creditors'
44 accounts, trust accounts, business accounts, records, papers, files, safes and
45 vaults of all such persons used by a licensee for its operations under this
46 act.
47 (3) Every permittee and foreign permittee shall execute to the director
48 an agreement of consent to examination of any and all bank accounts of the
49 permittee providing the director with authority to make such examination at
50 any time the director, in his discretion, deems it to be in the public inter-
51 est.
14
1 (4) The cost of examination for the first annual examination each year
2 and any investigation shall be paid to the director by each permittee licensee
3 so examined or investigated and the director may maintain an action for the
4 recovery of such costs against the permittee licensee or against the surety
5 providing the bond to indemnify the state for such expenditures as required by
6 this chapter act. The cost shall be fixed annually by the director, but shall
7 not exceed twenty-five fifty dollars ($250.00) per examination hour.
8 (54) Each permittee collection agency licensee shall acknowledge in writ-
9 ing each account received for collection and shall maintain a record of such
10 account, and shall make a permanent record of all sums collected by him and of
11 all disbursements made. by him. Every permittee collection agency licensee
12 shall keep and preserve all records relating to accounts received for collec-
13 tion, collections moneys collected, receipts, and disposal or disbursement of
14 all creditors' funds for a period of five three (53) years after the final
15 disposition of any account. It shall be unlawful for any person to intention-
16 ally make any false entry, omit to make a necessary entry, mutilate, secrete
17 away, destroy or otherwise dispose of any record mentioned referenced in this
18 subsection, provided a record may be disposed of after the five three (53)
19 year period heretofore provided.
20 (65) Every permittee collection agency licensee shall, within thirty (30)
21 days after the close following the end of each calendar month, pay to his
22 creditors the net proceeds of remit to his creditor clients all funds due them
23 resulting from collections made by the permittee licensee during said calendar
24 month. Each permittee shall report to the creditor all collections made by him
25 and/or any payments made to the creditor within thirty (30) days after the
26 close Such licensees shall provide each of their creditor clients a written
27 statement of all moneys collected on behalf of such creditor clients and any
28 payments made to such creditor clients within thirty (30) days following the
29 end of each calendar month.
30 (76) Every permittee shall maintain his books and records in accordance
31 with generally accepted accounting practices subject to such rules and regula-
32 tions as adopted by the director Every licensee shall maintain books and
33 records, including financial records in accordance with generally accepted
34 accounting principles, in a manner that will enable the director to determine
35 whether the licensee is complying with the provisions of this act.
36 (87) The director, may impound the creditors' accounts, or trust accounts
37 of any permittee if it shall be deemed in the general public interest
38 accounts, including all financial institution operating and trust accounts, of
39 any licensee or person required to be licensed under this act, if the director
40 deems it in the public interest and good cause exists therefor, in accordance
41 with section 67-5247, Idaho Code.
42 SECTION 18. That Section 26-2235, Idaho Code, be, and the same is hereby
43 repealed.
44 SECTION 19. That Section 26-2236, Idaho Code, be, and the same is hereby
45 amended to read as follows:
46 26-2236. SUBPOENAS. The director shall have the power to issue subpoenas
47 and bring before him any person, book, or writing in this state as necessary
48 to determine whether a person has violated any provision of this act, rule or
49 order thereunder, to swear witnesses and to take the testimony of any person
50 by deposition, with the same fees and mileage and in the same manner as pre-
51 scribed by law in judicial procedure in district courts of this state in civil
52 cases. Any party to a proposed revocation or suspension of a permit license
15
1 shall have the right of subpoena to compel the attendance of witnesses and
2 produce all reasonably necessary books and writings on his behalf. In case any
3 witness shall fail or refuse to comply with a subpoena to appear before the
4 director, the clerk of the district court of the county in which the adminis-
5 trative proceedings are held shall, upon demand of the director, issue a sub-
6 poena reciting the demand therefor and summoning the witness to appear and
7 testify at a time and place fixed; and violation of such subpoena or disobedi-
8 ence thereto shall be deemed and punished as a violation of any other a sub-
9 poena issued from by the district court. Any revocation or suspension of any
10 permit or license provided for by this chapter shall be governed by chapter
11 52, title 67, Idaho Code.
12 SECTION 20. That Section 26-2237, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 26-2237. FEES -- DISPOSITION OF FUNDS. All fees provided for in this
15 chapter act shall be paid to the director and by him remitted to the state
16 treasurer pursuant to section 59-1014, Idaho Code, and all such funds shall be
17 deposited to the credit of the finance administrative account in the state
18 dedicated fund.
19 SECTION 21. That Section 26-2238, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 26-2238. VIOLATIONS -- PENALTIES. (1) Any person who shall do business
22 within the state of Idaho as defined in this act, without a permit, or any
23 permit holder engages in activities authorized under this act, who fails to
24 establish and maintain a separate trust account for such creditors' funds for
25 each permit which he holds, or fails to make and keep the records as required
26 by under this act, or fails to disburse funds in accordance with the require-
27 ments of this act, or misappropriates, transfers, or converts to his own use
28 or benefit, funds belonging to or held for another person, shall, upon convic-
29 tion, be guilty of a felony and punishable by a fine not exceeding to exceed
30 five thousand dollars ($5,000) per violation or by imprisonment in the state
31 penitentiary for not more than five (5) years, or both, and.
32 (2) Any person, except a person exempt under section 26-2239, Idaho Code,
33 who engages in activities authorized under this act without first obtaining a
34 license as required by this act shall, upon conviction, be guilty of a felony
35 punishable by a fine not to exceed five thousand dollars ($5,000) or by
36 imprisonment for not more than five (5) years, or both.
37 (3) Aany person who shall fail to comply with any of the other provisions
38 of this act shall, upon conviction, be guilty of a misdemeanor.
39 SECTION 22. That Section 26-2239, Idaho Code, be, and the same is hereby
40 amended to read as follows:
41 26-2239. EXEMPTIONS. The provisions of this chapter act shall not apply
42 to the following:
43 (1) Any attorney-at-law duly authorized Persons licensed to practice law
44 in this state, to the extent that they are retained by their clients to engage
45 in activities authorized by this act, and such activities are incidental to
46 the practice of law. Such exemption shall not apply to an attorney engaged in
47 a separate business conducting the activities authorized by this act;
48 (2) Any regulated lender as defined in section 28-41-301(37), Idaho Code,
49 nor any and its subsidiary, affiliate or agent of such a regulated lender to
16
1 the extent that the regulated lender, subsidiary, affiliate or agent collects
2 for the regulated lender or engages in acts governed by this act which are
3 incidental to the business of a regulated lender;
4 (3) Any bank, trust company, credit union, insurance company or indus-
5 trial loan company authorized to do business in this state;
6 (4) Any federal, state or local governmental agency or instrumentality;
7 (5) Any real estate broker or real estate salesman licensed under the
8 laws of and residing within this state when while engaged in the regular prac-
9 tice of a real estate business acts authorized by his real estate license;
10 (6) Any abstract and title companies doing an person authorized to engage
11 in escrow business in this state while engaged in authorized escrow business;
12 (7) Any mortgage company to the extent that such mortgage company is
13 engaged in the regular business of a mortgage company as defined in section
14 26-2802, Idaho Code, except a mortgage company engaged in a separate business
15 conducting the activities authorized by this act;
16 (8) Any court appointed trustee, receiver or conservator;
17 (9) Any telephone corporation, as defined in subsection (10) of section
18 62-603, Idaho Code, whose initial request for payment on behalf of such tele-
19 phone corporation or on behalf of another person is made by the telephone cor-
20 poration as a part of regular telecommunications billings to its customers and
21 at a time before the account, bill, claim or other indebtedness becomes past
22 due or delinquent;
23 (10) Any person while acting as a debt collector for another person, both
24 of whom are related by common ownership or affiliated by corporate control, if
25 the person acting as a debt collector does so only for persons to whom he is
26 so related or affiliated and if the principal business of such person is not
27 the collection of debts.
28 SECTION 23. That Section 26-2240, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 26-2240. AGENT IDENTIFICATION -- QUARTERLY NOTICE -- FEE. Each permit
31 holder shall applicant for a license under this act, with its initial license
32 application, and each licensee at annual renewal, shall file with the director
33 a list of all agents including the name of the each agent and any other iden-
34 tifying information the director may require. A fee of twenty dollars ($20.00)
35 for each listed agent shall accompany the list. Each licensee shall notify
36 tThe director shall be notified in writing of any additions to the its agent
37 list no less often than every calendar quarter. A fee of twenty dollars
38 ($20.00) shall be filed with paid to the director for each additionally iden-
39 tified agent in the quarterly notification of additions to a permit holder's
40 licensee's agent list. An agent is not required to be listed, nor the fee paid
41 therefor, unless the agent acted for the permit holder licensee for more than
42 five thirty (530) business days.
43 SECTION 24. That Section 26-2243, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 26-2243. PROPERTY RIGHT IN ACCOUNTS -- PRACTICE OF LAW PROHIBITED. A per-
46 mit holder licensee under this act shall have a property right in any account
47 assigned to it for collection; provided, however, no right herein granted
48 shall authorize such permit holder licensee to engage in the practice of law.
49 SECTION 25. That Section 26-2244, Idaho Code, be, and the same is hereby
50 amended to read as follows:
17
1 26-2244. CEASE AND DESIST ORDERS, PENALTY. (1) Whenever it appears to the
2 director that it is in the public interest, he may order any person to cease
3 and desist from acts, practices, or omissions which constitute a violation of
4 this chapter act or a rule adopted or an order issued under this act.
5 (2) Whenever, after notice and the opportunity for a hearing, the direc-
6 tor finds that any person has violated engaged in any act, practice, or omis-
7 sion constituting a violation of any provision of this chapter act or a rule
8 adopted or an order issued under this act, the director may order the person
9 to cease and desist from such acts, practices or omissions which constitute a
10 violation of this chapter and:
11 (a) Impose a civil penalty of not more than two thousand five hundred
12 thousand dollars ($2,5005,000) for each violation upon any person found to
13 have violated any provision of this chapter act or a rule adopted or an
14 order issued under this act;
15 (b) Issue an order restoring to any person in interest any consideration
16 that may have been acquired or transferred in violation of this chapter
17 act or a rule adopted or an order issued under this act; or and
18 (c) Issue an order that the person violating this chapter act or a rule
19 adopted or an order issued under this act pay costs, which in the discre-
20 tion of the director may include an amount representing reasonable attor-
21 ney's fees and reimbursement for investigative efforts.
22 SECTION 26. That Section 26-2245, Idaho Code, be, and the same is hereby
23 amended to read as follows:
24 26-2245. DIRECTOR'S POWER TO ENJOIN VIOLATIONS. (1) Whenever it appears
25 to the director that any person, or employee or agent thereof, has engaged in
26 or is about to engage in any act or practice or omission constituting a viola-
27 tion of any provision of this chapter act, or any rule or order issued hereun-
28 der, he may in his discretion bring an action in any court of competent juris-
29 diction to enjoin any such acts, or practices or omissions and to enforce com-
30 pliance with this chapter act or any rules adopted or order issued hereunder.
31 Upon a showing that a person, or employee or agent of any person, thereof, has
32 engaged in or is about to engage in an act, or practice or omission constitut-
33 ing a violation of this chapter act or any rule adopted or order issued here-
34 under, a permanent or temporary injunction, or restraining order shall be
35 granted and a receiver or conservator may be appointed, which may be the
36 director, for the defendant's assets. The director shall not be required to
37 furnish a bond.
38 (2) In addition to the foregoing, the director, in his discretion and
39 upon a showing in any court of competent jurisdiction that a person has vio-
40 lated the any provisions of this chapter act or rule adopted or order issued
41 hereunder, may be granted the following additional remedies:
42 (a) An order restoring to any person in interest any consideration that
43 may have been acquired or transferred in violation of this chapter act;
44 (b) An order that the person violating this chapter act, rule or order
45 issued hereunder, pay a civil penalty to the department in an amount not
46 to exceed two thousand five hundred thousand dollars ($2,5005,000) for
47 each violation;
48 (c) An order allowing the director to recover costs, which in the discre-
49 tion of the court may include an amount representing reasonable attorney's
50 fees and reimbursement for investigative efforts; and
51 (d) An order granting other appropriate remedies upon a proper showing.
52 SECTION 27. That Section 26-2246, Idaho Code, be, and the same is hereby
18
1 repealed.
2 SECTION 28. That Chapter 22, Title 26, Idaho Code, be, and the same is
3 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
4 ignated as Section 26-2246, Idaho Code, and to read as follows:
5 26-2246. CLOSURE OR DISCONTINUANCE OF OPERATIONS -- REQUIREMENTS. (1)
6 Whenever the operations of a collection agency licensee under this act are
7 closed or discontinued due to revocation, termination, or relinquishment of a
8 collection agency license, or for any other reason, the collection agency
9 shall, within thirty (30) days following the closure or discontinuance of
10 operations, furnish the director with sufficient proof in a form to be deter-
11 mined by the director that:
12 (a) The collection agency has remitted to all of its creditor clients all
13 moneys collected on their behalf and due such creditor clients;
14 (b) All collection accounts, judgments obtained, and other accounts have
15 been returned to the creditor clients or other proper parties, and if
16 appropriate, assigned by the collection agency to its creditor clients or
17 other proper parties; and
18 (c) All valuable papers, documents, judgments and other property provided
19 to the collection agency by its creditor clients or other parties in con-
20 nection with the collection agency's collection activities have been
21 returned to the creditor clients or other proper parties.
22 (2) A collection agency which holds a license issued pursuant to this
23 act, upon closure or discontinuance of its operations, shall maintain the
24 bonds required of such licensee to conduct a collection agency business until
25 a final accounting of its affairs, as set forth in subsection (1) of this sec-
26 tion, has been filed with and approved by the director.
27 (3) Whenever the operations of a collection agency are closed or discon-
28 tinued as set forth in subsection (1) of this section, in the event the col-
29 lection agency does not complete all requirements of such subsection within
30 thirty (30) days following the closure or discontinuance of operations, upon
31 demand by the director, the collection agency shall permit the director to
32 take possession of its business records, bank accounts, including creditor
33 client trust accounts, other property belonging to its creditor clients or
34 third parties, and its assets. The director may then liquidate the collection
35 agency's business, return any moneys owed to the collection agency's creditor
36 clients, return the collection agency's accounts to its creditor clients,
37 return or assign any judgments to the agency's creditor clients, and take any
38 other actions which are reasonably necessary to cause the collection agency to
39 liquidate its assets and to comply with subsection (1) of this section.
40 (4) If a collection agency refuses to permit the director to take posses-
41 sion of its business records, bank accounts, creditor client trust accounts,
42 other property belonging to its creditor clients or third parties and its
43 assets, as set forth in subsection (3) of this section, the director may apply
44 to a court of competent jurisdiction in the county of the collection agency's
45 principal place of business for the appointment of a receiver or conservator
46 as set forth in section 26-2245(1), Idaho Code. Such receiver or conservator
47 may be the director.
48 (5) The expenses of the receiver or conservator and attorney's fees, and
49 all expenses necessarily incurred in liquidation of the collection agency,
50 shall be paid out of the funds in the control of the director or conservator,
51 to the extent those funds exceed any sums due and owing to the collection
52 agency's creditor clients or other proper parties. To the extent funds in the
53 control of the receiver are not sufficient to pay all sums due and owing to
19
1 the collection agency's creditor clients or other proper parties and to pay
2 the costs of a receiver or conservator and of liquidation of the collection
3 agency, the collection agency and its owners, shareholders, or interest hold-
4 ers shall be responsible for the balance of any reasonably necessary costs and
5 fees of liquidation.
6 SECTION 29. That Section 26-2248, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 26-2248. ADMINISTRATION OF ACT. The administration of the provisions of
9 this act shall be under the general supervision and control of the director,
10 subject to chapter 52, title 67, Idaho Code. The director may from time to
11 time make adopt, amend, and rescind such rules, regulations and forms and
12 issue orders necessary to carry out the provisions of this act. No rule, regu-
13 lation or form order may be made unless the director finds that the action is
14 necessary or appropriate for the public interest or for the protection of
15 creditors and debtors the public consistent with the purposes of this act.
16 SECTION 30. That Sections 26-2250 and 26-2251, Idaho Code, be, and the
17 same are hereby repealed.
18 SECTION 31. That Chapter 22, Title 26, Idaho Code, be, and the same is
19 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
20 ignated as Section 26-2251, Idaho Code, and to read as follows:
21 26-2251. SEVERABILITY. The provisions of this act are hereby declared to
22 be severable and if any provision of this act or the application of such pro-
23 vision to any person or circumstance is declared invalid for any reason, such
24 declaration shall not affect the validity of the remaining portions of this
25 act.
26 SECTION 32. That Section 1-2301A, Idaho Code, be, and the same is hereby
27 amended to read as follows:
28 1-2301A. DRAWING CHECK WITHOUT FUNDS OR INSUFFICIENT FUNDS -- CIVIL LIA-
29 BILITY. In any action filed in the small claims department against a person
30 who makes any check, draft or order for the payment of money which has been
31 dishonored for lack of funds or credit to pay the same, or because the maker
32 has no account with the drawee, the plaintiff, or a collection agency with a
33 permit license issued to it pursuant to section 26-22295, Idaho Code, which is
34 attempting to collect the dishonored check under a written agreement with the
35 payee or holder of the check, may recover from the defendant the amount of the
36 check, draft or order and, in addition thereto, the greater of the amount of
37 one hundred dollars ($100) or three (3) times the amount for which the check,
38 draft or order is drawn. Except as provided in section 1-2304, Idaho Code, the
39 plaintiff or collection agency may recover no other costs, fees, charges or
40 damages. However, damages recovered under the provisions of this section shall
41 not exceed by more than five hundred dollars ($500) the value of the check,
42 draft or order and may be awarded only if the plaintiff made written demand of
43 the defendant for payment of the amount of the check, draft or order not less
44 than ten (10) days before commencing the action, and if the defendant failed
45 to tender to the plaintiff, prior to commencement of the action, an amount of
46 money not less than the amount demanded. The written demand required by this
47 section shall be sent to the maker by certified mail at his last known
48 address, or by regular mail, supported by an affidavit of service by mailing,
20
1 to the address printed or written on the check as provided in section
2 28-22-106, Idaho Code, in which case the demand shall be deemed conclusive
3 three (3) days following the date the affidavit is executed. The written
4 demand shall fully advise the maker of the check, draft, or order of the con-
5 sequences of failure to make prompt payment under this section. The plaintiff
6 or collection agency must show proof of service by producing a copy of a
7 signed return receipt or affidavit of personal service.
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
Moved by Rusche
Seconded by Mathews
IN THE HOUSE OF REPRESENTATIVES
HOUSE AMENDMENTS TO H.B. NO. 451
1 AMENDMENTS TO SECTION 1
2 On page 2 of the printed bill, in line 39 following "Code." insert: "A
3 credit repair organization does not include:
4 (a) A consumer reporting agency, as defined in 15 U.S.C. section
5 1681a(f), that provides consumer reports based on information furnished by
6 creditors or any affiliate or subsidiary of such consumer reporting agency
7 as defined by rule promulgated by the director;
8 (b) A person who has an ongoing contractual arrangement with a consumer
9 reporting agency, as described in subsection (5)(a) of this section, to
10 obtain consumer reports from a consumer reporting agency for the purposes
11 of:
12 (i) Reselling such report, or any information contained in or
13 derived from such report, to a consumer; or
14 (ii) Monitoring information in such report on behalf of a consumer;
15 or
16 (c) A person to the extent that such person advertises, markets, provides
17 or facilitates consumer access to the products or services offered or pro-
18 vided by:
19 (i) An entity described in subsection (5)(a) of this section; or
20 (ii) A person described in subsection (5)(b) of this section.".
21 AMENDMENTS TO SECTION 9
22 On page 9, in line 6, following "(43) insert: "(a)"; and following line
23 16, insert:
24 "(b) Debt counselors or credit counselors who do not receive, hold or
25 disburse funds from debtors for payment to creditors shall not charge or
26 accept as a fee for their services more than twenty percent (20%) of the
27 principal amount of the debtor's unsecured debt at the time of contracting
28 for services for the management of debt. In the event of cancellation of
29 the contract by the debtor prior to its successful completion, the debt
30 counselor or credit counselor shall refund fifty percent (50%) of any col-
31 lected fees associated with the amount of debt remaining unsettled at the
32 time of the termination of the contract.".
33 AMENDMENTS TO SECTION 17
34 On page 14, in line 38, delete "financial institution"; and also in line
35 38, following "trust accounts" insert: "held in any financial institution"; in
36 line 39 following "act" insert: "who receives, holds or disburses consumer
37 funds".
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 451, As Amended
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO COLLECTION AGENCY ACT; AMENDING SECTION 26-2222, IDAHO
3 CODE, TO REVISE AND ADD DEFINITIONS; AMENDING SECTION 26-2223, IDAHO CODE,
4 TO PROVIDE CORRECT TERMINOLOGY, TO REVISE CREDIT REPAIR ACTIVITIES REQUIR-
5 ING A LICENSE, AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
6 26-2223A, IDAHO CODE, TO MAKE TECHNICAL CORRECTIONS, TO REQUIRE THAT
7 LICENSEES MAINTAIN A LICENSED HOME OFFICE AS A PRINCIPAL LOCATION FOR COL-
8 LECTION ACTIVITIES AND TO REVISE PROVISIONS FOR A DESIGNATED RESPONSIBLE
9 PERSON; AMENDING SECTION 26-2224, IDAHO CODE, TO REVISE LICENSE APPLICA-
10 TION REQUIREMENTS; REPEALING SECTION 26-2225, IDAHO CODE, RELATING TO
11 INFORMATION AND MATERIALS REQUIRED WITH APPLICATION, EXAMINATION FEE AND
12 CONSENT TO SERVICE; AMENDING CHAPTER 22, TITLE 26, IDAHO CODE, BY THE
13 ADDITION OF A NEW SECTION 26-2225, IDAHO CODE, TO PROVIDE FOR THE
14 DIRECTOR'S APPROVAL OF LICENSE APPLICATIONS; AMENDING CHAPTER 22, TITLE
15 26, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 26-2227, IDAHO CODE, TO
16 PROVIDE FOR THE DENIAL OF LICENSE APPLICATIONS OR THE SUSPENSION OR REVO-
17 CATION OF A LICENSE; AMENDING SECTION 26-2228, IDAHO CODE, TO REVISE
18 POWERS OF THE DIRECTOR OF THE DEPARTMENT OF FINANCE; AMENDING SECTION
19 26-2229, IDAHO CODE, TO DELETE PROVISIONS PROVIDING FOR PERMITS AND APPLI-
20 CATIONS AND TO REVISE REQUIREMENTS FOR COLLECTION AGENCY CONTRACTS; AMEND-
21 ING SECTION 26-2229A, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY, TO
22 REVISE PROVISIONS REQUIRING OPEN, FAIR AND HONEST DEALINGS, TO MAKE TECH-
23 NICAL CHANGES AND TO PROHIBIT CERTAIN PRACTICES; AMENDING SECTION 26-2230,
24 IDAHO CODE, TO REVISE PROVISIONS FOR REGISTRATION OF ADDITIONAL PLACES OF
25 BUSINESS AND TO DELETE PROVISIONS PERMITTING LIMITED COLLECTION ACTIVITIES
26 AT CERTAIN LOCATIONS; AMENDING SECTION 26-2231, IDAHO CODE, TO PROVIDE FOR
27 LICENSE RENEWAL AND TO ESTABLISH A FEE; AMENDING SECTION 26-2232, IDAHO
28 CODE, TO MAKE TECHNICAL CORRECTIONS, TO PROVIDE CORRECT TERMINOLOGY, TO
29 REVISE PROVISIONS FOR FILING A BOND AND TO DELETE A REQUIREMENT RELATING
30 TO INDEMNIFICATION OF THE DEPARTMENT; REPEALING SECTION 26-2232A, IDAHO
31 CODE, RELATING TO ALTERNATE BONDING; AMENDING CHAPTER 22, TITLE 26, IDAHO
32 CODE, BY THE ADDITION OF A NEW SECTION 26-2232A, IDAHO CODE, TO PROVIDE
33 BONDING REQUIREMENTS FOR DEBT COUNSELORS, CREDIT COUNSELORS AND CREDIT
34 ORGANIZATIONS; AMENDING SECTION 26-2233, IDAHO CODE, TO PROVIDE CORRECT
35 TERMINOLOGY AND TO REVISE PROVISIONS REQUIRING TRUST ACCOUNTS; AMENDING
36 SECTION 26-2234, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY, TO MAKE TECH-
37 NICAL CORRECTIONS, TO REVISE PROVISIONS RELATING TO INVESTIGATION AND
38 EXAMINATION OF LICENSEES, TO REVISE PROVISIONS FOR RECORDKEEPING, TO PRO-
39 VIDE FOR REMITTANCE OF FUNDS AND TO REVISE PROVISIONS AUTHORIZING THE
40 DIRECTOR TO IMPOUND ACCOUNTS OF A LICENSEE; REPEALING SECTION 26-2235,
41 IDAHO CODE, RELATING TO DENIAL, SUSPENSION AND REVOCATION OF PERMIT;
42 AMENDING SECTION 26-2236, IDAHO CODE, TO REVISE PROVISIONS RELATING TO
43 SUBPOENAS, TO PROVIDE CORRECT TERMINOLOGY AND TO MAKE TECHNICAL CORREC-
44 TIONS; AMENDING SECTION 26-2237, IDAHO CODE, TO PROVIDE CORRECT TERMINOL-
45 OGY; AMENDING SECTION 26-2238, IDAHO CODE, TO MAKE TECHNICAL CORRECTIONS
46 AND TO REVISE PROVISIONS FOR VIOLATIONS AND PENALTIES; AMENDING SECTION
2
1 26-2239, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY AND TO REVISE PROVI-
2 SIONS RELATING TO EXEMPTIONS; AMENDING SECTION 26-2240, IDAHO CODE, TO
3 PROVIDE CORRECT TERMINOLOGY AND TO REVISE PROVISIONS FOR IDENTIFYING
4 AGENTS AND FOR FEES; AMENDING SECTION 26-2243, IDAHO CODE, TO PROVIDE COR-
5 RECT TERMINOLOGY; AMENDING SECTION 26-2244, IDAHO CODE, TO PROVIDE CORRECT
6 TERMINOLOGY, TO REVISE PROVISIONS FOR CEASE AND DESIST ORDERS AND TO
7 REVISE CIVIL PENALTIES; AMENDING SECTION 26-2245, IDAHO CODE, TO PROVIDE
8 CORRECT TERMINOLOGY, TO MAKE TECHNICAL CORRECTIONS AND TO REVISE CIVIL
9 PENALTIES; REPEALING SECTION 26-2246, IDAHO CODE, RELATING TO DISCONTINU-
10 ANCE OF OPERATIONS; AMENDING CHAPTER 22, TITLE 26, IDAHO CODE, BY THE
11 ADDITION OF A NEW SECTION 26-2246, IDAHO CODE, TO PROVIDE REQUIREMENTS FOR
12 COLLECTION AGENCY CLOSURE OR DISCONTINUANCE OF OPERATIONS; AMENDING SEC-
13 TION 26-2248, IDAHO CODE, TO MAKE TECHNICAL CORRECTIONS AND TO PROVIDE
14 THAT THE DIRECTOR MAY ISSUE ORDERS; REPEALING SECTION 26-2250, IDAHO CODE,
15 RELATING TO FOREIGN PERMITTEES AND SECTION 26-2251, IDAHO CODE, RELATING
16 TO CANCELLATION OF PERMITS; AMENDING CHAPTER 22, TITLE 26, IDAHO CODE, BY
17 THE ADDITION OF A NEW SECTION 26-2251, IDAHO CODE, TO PROVIDE SEVERABIL-
18 ITY; AND AMENDING SECTION 1-2301A, IDAHO CODE, TO PROVIDE CORRECT TERMI-
19 NOLOGY AND TO PROVIDE A CORRECT CODE REFERENCE.
20 Be It Enacted by the Legislature of the State of Idaho:
21 SECTION 1. That Section 26-2222, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 26-2222. DEFINITIONS. As used in this chapter act:
24 (1) "Agent" means any person who, is compensated on a commission basis or
25 by salary, or both, by any permittee and who either for compensation or gain,
26 or in the expectation of compensation or gain, contacts debtors or creditors
27 persons in Idaho in connection with the collection agency business activities
28 of the permittee a licensee or person required to be licensed under this act.
29 (2) "Business funds" means all moneys belonging to or due the permittee a
30 licensee or person required to be licensed in connection with the operation of
31 a collection agency business activities authorized under this act.
32 (3) "Collection activities" means the activities enumerated in subsec-
33 tions (2) through (6) of section 26-2223, Idaho Code.
34 (4) "Collection agency," "collection bureau" or "collection office" shall
35 be means a person who engages in any of the activities enumerated in subsec-
36 tions (2) through (6) of section 26-2223, Idaho Code.
37 (4) "Director" means the director of the department of finance.
38 (5) "Credit repair organization" means any person engaged in any of the
39 activities enumerated in subsection (8) of section 26-2223, Idaho Code. A
40 credit repair organization does not include:
41 (a) A consumer reporting agency, as defined in 15 U.S.C. section
42 1681a(f), that provides consumer reports based on information furnished by
43 creditors or any affiliate or subsidiary of such consumer reporting agency
44 as defined by rule promulgated by the director;
45 (b) A person who has an ongoing contractual arrangement with a consumer
46 reporting agency, as described in subsection (5)(a) of this section, to
47 obtain consumer reports from a consumer reporting agency for the purposes
48 of:
49 (i) Reselling such report, or any information contained in or
50 derived from such report, to a consumer; or
51 (ii) Monitoring information in such report on behalf of a consumer;
52 or
3
1 (c) A person to the extent that such person advertises, markets, provides
2 or facilitates consumer access to the products or services offered or pro-
3 vided by:
4 (i) An entity described in subsection (5)(a) of this section; or
5 (ii) A person described in subsection (5)(b) of this section.
6 (56) "Creditor" means any person who transfers to a permittee accounts
7 due and owing for collection purposes offers or extends credit creating a debt
8 or to whom a debt is owed.
9 (7) "Creditor client" means any person who transfers or assigns to a col-
10 lection agency licensee or person required to be so licensed under this act,
11 any account, bill, claim or other indebtedness for collection purposes.
12 (68) "Creditors' account "Creditor funds" means all funds due and owing a
13 creditor within the definition of this chapter by a licensee or person
14 required to be licensed under this act.
15 (9) "Debt counselor" or "credit counselor" means any person engaged in
16 any of the activities enumerated in subsection (7) of section 26-2223, Idaho
17 Code.
18 (10) "Department" means the Idaho department of finance.
19 (11) "Director" means the director of the Idaho department of finance.
20 (12) "Licensee" means a person who has obtained a license under this act.
21 (713) "Net collections" means all funds that are due to creditors from the
22 permittee licensee pursuant to the contract between the permittee licensee and
23 creditor, or permittee licensee and debtor without taking into account any
24 offset or funds due from the creditor to the permittee licensee, because of
25 the creditor having collected any part of the account due, plus all funds that
26 the permittee licensee agreed to return to debtors or that were not to be
27 applied to debts.
28 (8) "Permittee" means a person who has a permit to do business as a col-
29 lection agency, or debt counselor, or credit counselor in Idaho.
30 (914) "Person" means any permittee, agent, solicitor, individual, corpora-
31 tion, association, copartnership partnership, limited liability partnership,
32 trust, company, limited liability company, or unincorporated organization
33 association.
34 (10) "Debt counselor" means any person engaged in any of the activities
35 enumerated in subsection (6) of section 26-2223, Idaho Code.
36 (11) "Credit counselor" means any person engaged in any of the activities
37 enumerated in subsection (6) or (7) of section 26-2223, Idaho Code. No credit
38 counselor shall be granted a permit pursuant to this chapter unless qualified
39 as an exempt organization under section 501(c)(3) of the Internal Revenue
40 Code.
41 SECTION 2. That Section 26-2223, Idaho Code, be, and the same is hereby
42 amended to read as follows:
43 26-2223. COLLECTION AGENCY, DEBT COUNSELOR, OR CREDIT COUNSELOR, PERMITS
44 OR CREDIT REPAIR ORGANIZATION -- LICENSE REQUIRED. No person shall without
45 complying with the terms of this chapter act and obtaining a permit license
46 from the director:
47 (1) Operate as a collection agency, collection bureau, collection office,
48 debt counselor, or credit counselor, or credit repair organization in this
49 state.
50 (2) Engage, either directly or indirectly, in this state in the business
51 of collecting or receiving payment for others of any account, bill, claim or
52 other indebtedness.
53 (3) Solicit or advertise for the right in this state to collect or
4
1 receive payment for another of any account, bill, claim or other indebtedness.
2 (4) Sell or otherwise distribute in this state any system or systems of
3 collection letters and or similar printed matter where the name of any person
4 other than the particular creditor to whom the debt is owed appears.
5 (5) Engage in any activity in this state which indicates, directly or
6 indirectly, that a third party is or may be involved in effecting any collec-
7 tions.
8 (6) Engage or offer to engage in this state, directly or indirectly, in
9 the business of collecting any form of indebtedness for that person's own
10 account if the indebtedness was acquired from another person and if the
11 indebtedness was either delinquent or in default at the time it was acquired.
12 (7) Engage or offer to engage in this state in the business of receiving
13 money from debtors for application to or payment of to or prorating of a debt
14 owed to, any creditor or creditors of such debtor., or
15 (7) Eengage or offer to engage in this state in the business of providing
16 counseling or other services to debtors in the management of their debts, and
17 or contracting with the debtor to effect the adjustment, compromise, or dis-
18 charge of any account, note or other indebtedness of the debtor.
19 (8) Engage or offer to engage in this state in the business of credit
20 repair which includes obtaining, for others, improvements in credit records,
21 extensions of credit for clients, or causing the removal of documents from the
22 credit records of a client maintained by a credit reporting agency.
23 (9) Engage or offer to engage in this state, directly or indirectly, in
24 the business of collecting any form of indebtedness for that person's own
25 account if the indebtedness was acquired from another person and if the
26 indebtedness was either delinquent or in default at the time it was acquired
27 selling, providing or performing services to improve any consumer's credit
28 record, credit history or credit rating, or providing advice or assistance to
29 any consumer with regard to his credit record, credit history or credit
30 rating.
31 SECTION 3. That Section 26-2223A, Idaho Code, be, and the same is hereby
32 amended to read as follows:
33 26-2223A. OFFICE TO BE MAINTAINED IN STATE COLLECTION AGENCY OFFICE
34 REQUIREMENTS -- DESIGNATION OF RESPONSIBLE PERSON. Every permittee under this
35 chapter must maintain an office in the state of Idaho, staffed with at least
36 one (1) natural person who passed the examination required in section 26-2229,
37 Idaho Code, or is exempt from the provisions of this chapter pursuant to sec-
38 tion 26-2239(1), Idaho Code, at each branch or facility.
39 (1) Each permittee licensee shall maintain a home office licensed under
40 this act as the licensee's principal location for collection activities. Each
41 licensee must have maintain a listed Idaho telephone number and must be open
42 to the public during normal business hours on each business day, provided,
43 however, that the director may in his discretion approve a request for opening
44 at during hours other than normal business hours or a portion of a business
45 day. A business day within the meaning of this section does not include Satur-
46 days, Sundays, or legal holidays.
47 (2) Each permittee under this chapter must licensee shall designate a
48 natural person, who need not be a resident of the state of Idaho meets the
49 experience requirement of section 26-2224(6), Idaho Code, to be responsible
50 for the business collection activities carried on at the each office and who
51 has passed the examination for a permit required by section 26-2229, Idaho
52 Code of the licensee. If the person designated by the permittee to be respon-
53 sible for business carried on at the office licensee for such purpose is not
5
1 normally available in at the Idaho office licensee's designated location,
2 then the permittee's licensee's collection activities with debtors in Idaho
3 must begin with a written notice to each debtor setting forth a mailing
4 address and a toll-free telephone number whereby a debtor may contact the des-
5 ignated responsible person during normal business hours.
6 SECTION 4. That Section 26-2224, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 26-2224. FORM OF LICENSE APPLICATION. Every applicant for such permit a
9 license under this act shall file in the department of finance with the direc-
10 tor an application in a form to be prescribed by the director setting forth
11 that shall include:
12 (1) The name of the applicant; if an individual; if the applicant is a
13 corporation, a list of its officers and directors and their addresses; if the
14 applicant is a partnership, a list of the partners and their addresses; or if
15 the applicant is a limited liability company, a list of its members or man-
16 agers and their addresses. Every corporation shall designate and appoint one
17 (1) or more of its officers or employees, every partnership shall designate
18 and appoint one (1) or more of its partners, and every limited liability com-
19 pany shall designate and appoint one (1) or more of its members or managers
20 who shall submit to the examination hereinafter required. No permit shall be
21 issued to any corporation, partnership or limited liability company unless and
22 until the persons so designated shall submit to and pass the examination
23 required by this chapter.
24 (2) The street address of the applicant's principal location. of the
25 principal office or place of business of the applicant.
26 (3) Other All names, if any, by which the applicant conducts, engages in
27 or solicits business collection activities.
28 (4) The names of all persons and organizations with which the applicant
29 is affiliated, in such business, and the location of the principal office or
30 place of business of each such affiliation affiliate.
31 (5) A complete description of the business to be conducted, or plan of
32 operation contemplated, by the applicant in this state.
33 (6) The name, address and qualifications of a natural person possessing a
34 minimum of three (3) years of experience related to the business to be con-
35 ducted under this act who will supervise the applicant's office locations from
36 which business activities in this state will be conducted.
37 (7) A list Copies of all papers and filings contracts, forms, form let-
38 ters, and advertisements or solicitations to be used by the applicant in its
39 business activities under this act, which must accompany the application and
40 be identified as exhibits by number.
41 (7) A financial statement showing the applicant to have a financial net
42 worth of not less than two thousand five hundred dollars ($2,500), which
43 statement shall be subject to disclosure according to chapter 3, title 9,
44 Idaho Code. The financial statement shall specify assets and liabilities, pro-
45 viding detailed reference to each item listed to inform the director of the
46 nature and extent of such assets and liabilities. This financial statement
47 shall be signed by the applicant or its proper agent. The net worth shall not
48 include any notes, accounts, bills, and judgments held for collection by the
49 applicant nor shall it include good will or other assets the value of which is
50 speculative and not susceptible to prompt liquidation.
51 (8) If the applicant is a corporation, a limited liability company, part-
52 nership, or limited liability partnership, a copy of its articles of incorpo-
53 ration, articles of organization, partnership agreement, or operating agree-
6
1 ment, duly authenticated.
2 (9) A list of the names, business addresses and telephone numbers of all
3 agents who will contact persons or solicit business for the applicant in this
4 state.
5 (10) The name and business address of the applicant's agent for service of
6 process located in this state.
7 (11) A nonrefundable application fee of one hundred fifty dollars ($150).
8 (12) An agreement of consent authorizing the director to examine any and
9 all of the applicant's financial accounts used for business activities under
10 this act.
11 (813) Such other information concerning the applicant's business as the
12 director may reasonably require. Such application shall be executed and veri-
13 fied by the by the applicant or applicants personally, or by an individual
14 associated with the applicant as designated by the director on oath by the
15 applicant. Information required at the time of application, except for adver-
16 tisements and solicitations, shall be updated and filed with the director as
17 necessary to keep the information current.
18 SECTION 5. That Section 26-2225, Idaho Code, be, and the same is hereby
19 repealed.
20 SECTION 6. That Chapter 22, Title 26, Idaho Code, be, and the same is
21 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
22 ignated as Section 26-2225, Idaho Code, and to read as follows:
23 26-2225. APPROVAL OF LICENSE APPLICATION. (1) The director shall act upon
24 all applications for a license under this act. If the director determines that
25 the requirements of this act have been met and all applicable fees paid, and
26 the applicant is not otherwise unqualified for licensure, the director shall
27 issue a license to the applicant.
28 (2) Each license issued under this section shall remain in full force and
29 effect unless the licensee fails to satisfy the renewal requirements of this
30 act, or the license is relinquished, suspended, terminated or revoked.
31 SECTION 7. That Chapter 22, Title 26, Idaho Code, be, and the same is
32 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
33 ignated as Section 26-2227, Idaho Code, and to read as follows:
34 26-2227. DENIAL, SUSPENSION OR REVOCATION OF LICENSE. (1) An application
35 for a license may be denied or, after notice and the opportunity for a hear-
36 ing, a license may be suspended or revoked by the director if he finds that
37 facts or conditions exist which would have justified the director in refusing
38 to grant a license had such facts or conditions been known to exist at the
39 time the license was issued, or that the licensee or the applicant, or any
40 officer, member, owner, manager or agent of a licensee or applicant:
41 (a) Has violated any provision of this act, the federal fair debt collec-
42 tion practices act, 15 U.S.C. section 1692, et seq., as amended, or any
43 rule or order of the director under this act;
44 (b) Is not legally qualified to do business in this state;
45 (c) Has failed to retain a natural person with three (3) years of experi-
46 ence related to the type of business conducted by the licensee under this
47 act to supervise each office from which business activities are conducted
48 under this act;
49 (d) Has failed, refused or neglected to pay or remit to any creditor cli-
50 ent the agreed portion of any sum collected by the applicant or licensee
7
1 on any bill, claim, account or other indebtedness entrusted to such appli-
2 cant or licensee for collection;
3 (e) Has failed to return to a debtor an amount that was not owed on his
4 debt;
5 (f) Has made a material misstatement in the application for such license
6 or renewal;
7 (g) Has obtained or attempted to obtain a license or renewal by fraud or
8 misrepresentation;
9 (h) Has misappropriated or converted to his own use or improperly with-
10 held moneys collected or held for any other person, except that a collec-
11 tion agency licensee may convert into business funds his portion of any
12 moneys collected on behalf of a creditor client, pursuant to a written
13 agreement with the creditor client and in compliance with this act;
14 (i) Has falsely represented himself as a licensee for the purpose of
15 soliciting for or representing any business covered in this act;
16 (j) Has been convicted of, or a court of competent jurisdiction has
17 entered a withheld judgment for any felony, or for a misdemeanor involving
18 financial wrongdoing or moral turpitude;
19 (k) Has had a license substantially equivalent to a license under this
20 act issued by another state revoked, suspended or denied; or
21 (l) Demonstrates a lack of fitness to engage in business activities
22 authorized for a licensee under this act.
23 (2) The director may, after notice and the opportunity for a hearing,
24 impose upon any licensee, or person required to be licensed under this act, a
25 civil penalty of not more than five thousand dollars ($5,000) for each viola-
26 tion of this act.
27 (3) The director may, after notice and the opportunity for a hearing,
28 impose upon a licensee, or person required to be licensed under this act, any
29 sanction authorized by this section if the director finds that an agent of the
30 licensee, or person required to be licensed under this act, has violated any
31 provision of this act.
32 (4) The director may, in his discretion, and by an order issued in accor-
33 dance with chapter 52, title 67, Idaho Code, prohibit a licensee from using an
34 individual as an agent if the individual has violated any provision of this
35 act, or any similar statute or rule of another state.
36 (5) Any denial, suspension or revocation of any license issued under this
37 act shall be governed by chapter 52, title 67, Idaho Code.
38 SECTION 8. That Section 26-2228, Idaho Code, be, and the same is hereby
39 amended to read as follows:
40 26-2228. POWERS OF THE DIRECTOR. The director shall have the power to
41 provide the manner and method for conducting examinations. Applications for
42 examination shall be filed with the director at least ten (10) days prior to
43 the examination date.
44 The examination shall be uniformly given, may be written or oral or a com-
45 bination of both and shall be practical in nature. The examination may include
46 questions on bookkeeping, credit adjusting, business law, collection proce-
47 dure, business ethics, agency, debtor and creditor relationship, trust funds,
48 creditors' funds, business funds, fiduciary relationships, and the provisions
49 of this act and the rules duly issued by the director pursuant to this act,
50 and such other subject matter as the director by rule may specify. The exami-
51 nation shall be given twice each year or at such more frequent intervals as
52 the director may direct In addition to any other duties authorized by law, the
53 director shall:
8
1 (1) Administer and enforce the provisions and requirements of this act;
2 (2) Conduct investigations and issue subpoenas as necessary to determine
3 whether a person has violated any provision of this act, rule or order hereun-
4 der;
5 (3) Conduct examinations of the books and records of licensees related to
6 business activities authorized under this act and conduct investigations as
7 necessary and proper for the enforcement of the provisions of this act, rules
8 or orders hereunder;
9 (4) Pursuant to chapter 52, title 67, Idaho Code, issue orders and pro-
10 mulgate rules that, in the opinion of the director, are necessary to execute,
11 enforce and effectuate the purposes of this act; and
12 (5) Require that all funds collected by the department under this act be
13 deposited into the finance administrative account pursuant to section 67-2702,
14 Idaho Code.
15 SECTION 9. That Section 26-2229, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 26-2229. EXAMINATION -- PERMIT CONTRACTS. (1) The director shall examine
18 each application for a permit and accompanying papers and investigate the
19 qualifications of the applicant and if he finds therefrom that the same are in
20 proper form, that the literature proposed to be circulated does not tend to
21 conceal or misrepresent any fact to the detriment of any person dealing with
22 the applicant, that the contract or contracts proposed to be entered into for
23 the collection or payment or prorating of accounts, bills, claims or other
24 indebtedness by the applicant, or prorating or receiving money for payment to
25 creditors are equitable, fair and reasonable, and that the applicant meets all
26 other requirements and qualifications of this act, he shall examine the appli-
27 cant if an individual, or the designated officer or officers or employees of
28 any corporation and the designated member or members of any partnership, in
29 the manner described in section 26-2225, Idaho Code, and if such applicant or
30 designee passes a satisfactory examination, he shall cause a permit to be
31 issued authorizing the applicant to conduct such a business in this state sub-
32 ject to the provisions of this act, until the fifteenth day of March next
33 thereafter.
34 (2) If the director finds that the applicant does not qualify under the
35 provisions of this act, the application shall be denied. If he finds the
36 applicant is qualified he must issue a permit upon the filing of the bonds
37 required by this act and the payment of an annual permit fee as fixed by the
38 director, but not to exceed fifty dollars ($50), except that no permit fee
39 need be paid by a nonprofit corporation or association conducting credit coun-
40 seling or debt prorating activities.
41 (31) Contracts between collection agency licensees or collection agencies
42 required to be licensed under this act and creditor clients shall be in writ-
43 ing.
44 (2) No It shall be a violation of this act for any collection agency con-
45 tract shall be deemed equitable, fair or reasonable within the meaning of this
46 section which in substance either to:
47 (a) Permits the applicant Authorize a collection agency to retain any
48 sums due the collected on behalf of a creditor on any account, bill, claim
49 or other indebtedness collected for him by the applicant on account of, or
50 as a setoff against, any fee, commission, charge, expense or compensation
51 claimed client, other than the regular collection fees or commissions, to
52 be due from such creditor on any other account whatever.
53 (b) Penalizes the creditor for failure to produce evidence in support of
9
1 any account, bill, claim or item of indebtedness placed with the applicant
2 for collection in addition to that delivered upon the execution of such
3 contract. authorized by this act;
4 (cb) Penalizes such a creditor client for any unintentional error, mis-
5 take or omission in furnishing to the applicant the correct name or
6 address of any debtor. to a collection agency; or
7 (dc) Stipulates, directly or indirectly, for Require the payment of any
8 fee, commission or compensation in excess of fifty per cent percent (50%)
9 of the amount actually collected on any account, bill, claim or other
10 indebtedness entrusted to the applicant collection agency for collection.,
11 provided, hHowever, that in the case of that a collection agency collects
12 interest collected by a permittee on an account, the creditor client and
13 the permittee by agreement between them collection agency may provide
14 agree in writing for division of such interest between them without such
15 percentage limitation.; and provided further that Furthermore, in the case
16 of the collection of checks dishonored by nonacceptance or nonpayment, the
17 creditor client and the permittee collection agency, by written agreement
18 between them, may provide, in place of a percentage fee, for the payment
19 of a set dollar amount collection fee not to exceed the amount provided in
20 section 28-22-105, Idaho Code, which shall not be subject to the fifty per
21 cent percent (50%) limitation. Collection agreements to proceed under sec-
22 tion 1-2301A, Idaho Code, shall be subject to the fifty per cent percent
23 (50%) limitation.
24 (43) (a) A permit holder, engaging in the business of receiving money
25 from debtors for application to or payment or prorating the account or
26 accounts of any creditor or creditors of such debtor, for compensation or
27 otherwise, or in the business of acting as the assignee for the benefit of
28 creditors as a primary or secondary object, No debt counselor, credit
29 counselor or credit repair organization licensed or required to be
30 licensed under this act shall not take or receive for services performed
31 by such permit holder for any one (1) person more than fifteen per cent
32 percent (15%) of the amount received by it at any one (1) time from or on
33 behalf of that person for payment or prorating to creditors, and no other
34 charges shall be made or received for any such service.
35 (b) Debt counselors or credit counselors who do not receive, hold or dis-
36 burse funds from debtors for payment to creditors shall not charge or
37 accept as a fee for their services more than twenty percent (20%) of the
38 principal amount of the debtor's unsecured debt at the time of contracting
39 for services for the management of debt. In the event of cancellation of
40 the contract by the debtor prior to its successful completion, the debt
41 counselor or credit counselor shall refund fifty percent (50%) of any col-
42 lected fees associated with the amount of debt remaining unsettled at the
43 time of the termination of the contract.
44 SECTION 10. That Section 26-2229A, Idaho Code, be, and the same is hereby
45 amended to read as follows:
46 26-2229A. REQUIREMENT OF FAIR, OPEN AND HONEST DEALING -- PROHIBITED
47 PRACTICES. (1) Every permittee, foreign permittee licensee or person required
48 to be licensed under this act and its agents shall deal openly, fairly, and
49 honestly without deception in the conduct of the collection agency its busi-
50 ness activities in this state under this act.
51 (2) When not inconsistent with the statutes of this state, the provisions
52 of the federal fair debt collection practices act, 15 U.S.C. section 1692, et
53 seq., as amended, may be enforced by the director against agents, permittees
10
1 and foreign permittees collection agencies licensed or required to be licensed
2 under the provisions of this chapter act.
3 (23) In any and every instance where the permittee a collection agency
4 licensee has a managerial or financial interest in the a creditor client, or
5 where the a creditor client has a managerial or financial interest in the per-
6 mittee a collection agency licensee, disclosure of such interest must be made
7 on each and every contact with a debtor in seeking to make a collection of any
8 account, claim, or other indebtedness. where such interest or relationship
9 exists between creditor and permittee.
10 (34) No permittee, foreign permittee collection agency licensee, or col-
11 lection agency required to be licensed under this act, or agent of such col-
12 lection agency shall collect or attempt to collect any interest or other
13 charges, fees, or expenses incidental to the principal obligation unless such
14 interest or incidental fees, charges, or expenses: are:
15 (a) Are eExpressly authorized by statute;
16 (b) Are aAllowed by court rule ruling against the debtor;
17 (c) Have been judicially determined; or
18 (d) Are provided for in a written form agreement, to be signed by
19 both the debtor and the permittee licensee, and which has the prior
20 approval of the director with respect to the terms of the agreement
21 and amounts of the fees, interest, charges and expenses; or
22 (e) Reasonably relate to the actual cost associated with processing
23 a demand draft or other form of electronic payment on behalf of a
24 debtor for a debt payment, provided that the debtor has preauthorized
25 the method of payment and has been notified in advance that such pay-
26 ment may be made by reasonable alternative means that will not result
27 in additional charges, fees or expenses to the debtor.
28 (45) No person shall sell, distribute or make use of solicitations, col-
29 lection letters, demand forms or other printed matter which are made similar
30 to or resemble governmental forms or documents, or legal forms used in civil
31 or criminal proceedings.
32 (56) No person shall use any trade name, address, insignia, picture,
33 emblem or any other means which creates any impression that such person is
34 connected with or is an agency of government.
35 (7) No person licensed, or required to be licensed under this act, shall
36 misappropriate, transfer, or convert to his own use or benefit, funds belong-
37 ing to or held for another person in connection with business activities
38 authorized under this act.
39 (8) No credit repair organization licensed, or required to be licensed
40 under this act, shall charge or receive money or other valuable consideration
41 for the performance of any service which the credit repair organization has
42 agreed to perform for any consumer before such service is fully performed.
43 (9) No person licensed or required to be licensed under this act shall
44 make a representation or statement of material fact, or omit to state a mate-
45 rial fact, in connection with the offer, sale or performance of any service
46 authorized under this act, if the representation, statement or omission is
47 false or misleading or has the tendency or capacity to be misleading.
48 SECTION 11. That Section 26-2230, Idaho Code, be, and the same is hereby
49 amended to read as follows:
50 26-2230. BRANCH OFFICES. (1) The director may authorize a permittee, upon
51 request, to conduct collection activities authorized in this chapter at addi-
52 tional locations. The additional A licensee must register, in a manner pre-
53 scribed by the director, each additional place of business from which activi-
11
1 ties authorized under this act are directly or indirectly conducted in this
2 state. Registered locations shall be considered branches of the permittee
3 licensee. The licensee shall inform the director shall be informed of the
4 opening and closing of all branch locations operated by permittees of a branch
5 location at least thirty (30) days prior thereto, and no later than thirty
6 (30) days after the closing of any branch location.
7 (2) The director may authorize a permittee, upon written request, to con-
8 duct limited collection activities at locations other than the principal loca-
9 tion of the permittee or branches. The facilities may be at the domiciles of
10 the agents employed by the permit holder. Collection activities at facilities
11 shall be limited to telecommunications with creditors, clients, debtors, and
12 the permittee's offices and branches. The director shall be informed of the
13 opening and closing of all facility locations operated by permittees.
14 SECTION 12. That Section 26-2231, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 26-2231. RENEWAL OF PERMIT LICENSE. Upon application postmarked
17 (1) Oon or before the fifteenth day of March of each year, the holder of
18 any permit issued under the provisions of this chapter each licensee shall be
19 entitled to have such permit renewed for the succeeding calendar year upon
20 payment of the annual permit fee as fixed by the director, but not to exceed
21 fifty dollars ($50.00), compliance with the bond requirements of this chapter,
22 the filing of a financial statement in the form required by section
23 26-2224(7), Idaho Code, showing a net worth of at least two thousand five hun-
24 dred dollars ($2,500) for each place of business for which a permit is sought,
25 filing of all other documents required by section 26-2224, Idaho Code, and
26 approval by the director of all literature to be employed by the permittee
27 during the course of the business year, except no annual permit renewal fee
28 need be paid by a nonprofit corporation or association conducting credit coun-
29 seling or debt prorating activities pay to the director a nonrefundable
30 license renewal fee of one hundred dollars ($100) and shall file with the
31 director a license renewal form providing complete information as required by
32 the director.
33 (2) Failure to fully comply with the license renewal requirements of this
34 section by the fifteenth day of March of each year shall result in automatic
35 expiration of the license as of that date.
36 SECTION 13. That Section 26-2232, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 26-2232. COLLECTION AGENCY SURETY BONDS. (1) Upon approval of the appli-
39 cation and prior to the issuance of the permit a license under this act, the
40 applicant must shall file in the department of finance two (2) a surety bonds.
41 Both bonds shall be in a form provided prescribed by the attorney general of
42 this state, and director. The bond shall be executed by the applicant as prin-
43 cipal and by some a surety company authorized to do business in this state, as
44 surety, and shall be for the term of any permit the license issued to the
45 applicant. Each permittee shall be required to have the two (2) bonds for each
46 permit as hereinafter provided. In lieu of the bonds required by this section,
47 a certificate of deposit issued by an a financial institution authorized to
48 conduct business in Idaho bank and made payable to the director may be pro-
49 vided to the director in the same principal amount as required for the bonds.
50 The interest on the certificate of deposit shall be payable to the permittee
51 licensee. The certificate of deposit shall be maintained at all times during
12
1 which the permittee licensee is authorized to do business under Idaho law, and
2 this act. The certificate of deposit must provide that it will remain in
3 effect for at least three (3) years following discontinuance of operations,
4 unless released earlier by the director when all statutory requirements have
5 been met.
6 (a2) A The surety bond shall be executed to the state of Idaho in the sum
7 of fifteen thousand dollars ($15,000) or upon renewal in such larger sum as
8 hereinafter provided. In any case where a permittee licensee or its represen-
9 tatives has have failed to account for and pay over the proceeds of any col-
10 lection made or money received for payment or prorating to creditors, or has
11 have failed to return to a debtor any sum received that was not to be applied
12 to his debts, the creditor or debtor shall have in addition to all other legal
13 remedies a right of action in his own name on such bond without the necessity
14 of joining the permittee licensee in such action. The bond shall be continuous
15 in form and shall remain in full force and effect for the permit license
16 period. The surety may cancel the bond provided that the surety shall in such
17 event provide the permittee licensee and the director with notice no less than
18 thirty (30) days prior to cancelation cancellation of said bond. Such notice
19 shall be by registered or certified mail with request for a return receipt
20 and addressed to the permittee licensee at its main office and to the direc-
21 tor. In no event shall the liability of the surety for any and all claims
22 against the bond exceed the face amount of such bond.
23 (3) Upon renewal of any permit a license, the permittee licensee shall
24 supply the director with a statement of the preceding year's net collections.
25 The amount of the bond upon renewal shall be in the amount of fifteen thousand
26 dollars ($15,000), or two (2) times the average monthly net collections for
27 the preceding year computed to the next highest one thousand dollars ($1,000),
28 whichever sum is greater, up to a maximum of one hundred thousand dollars
29 ($100,000).
30 (b) A bond shall be executed to the state of Idaho in the sum of two
31 thousand dollars ($2,000), which shall be limited to the indemnification of
32 the department of finance for any and all expenses incurred as a result of
33 investigations, administrative proceedings, and prosecutions which shall be
34 instituted by the director against a permittee or licensee pursuant to this
35 act. The bond shall be continuous in form and remain in full force and effect
36 and run concurrently with the permit period and any renewal thereof. The
37 surety may cancel the bond provided that the surety shall in such event pro-
38 vide the permittee and the director with notice thirty (30) days prior to
39 cancelation of said bond. Such notice shall be registered or certified mail
40 with request for a return receipt and addressed to the permittee at its main
41 office and to the director. In no event shall the liability of the surety for
42 any and all claims against the bond exceed the face amount of such bond.
43 SECTION 14. That Section 26-2232A, Idaho Code, be, and the same is hereby
44 repealed.
45 SECTION 15. That Chapter 22, Title 26, Idaho Code, be, and the same is
46 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
47 ignated as Section 26-2232A, Idaho Code, and to read as follows:
48 26-2232A. DEBT COUNSELORS, CREDIT COUNSELORS, CREDIT REPAIR ORGANIZATIONS
49 -- BONDS. (1) Upon approval of the application and prior to the issuance of a
50 license under this act, an applicant for a license as a debt counselor, credit
51 counselor or credit repair organization shall file in the department of
52 finance a surety bond in a form prescribed by the director. The bond shall be
13
1 executed by the applicant as principal and by a surety company authorized to
2 do business in this state, and shall be for the term of the license issued to
3 the applicant. In lieu of the bond required by this section, a certificate of
4 deposit issued by a financial institution authorized to conduct business in
5 Idaho may be provided to the director in the same principal amount as required
6 for the bond. The interest on the certificate of deposit shall be payable to
7 the licensee. The certificate of deposit shall be maintained at all times dur-
8 ing which the licensee is authorized to do business under this act. The cer-
9 tificate of deposit must provide that it will remain in effect for at least
10 three (3) years following discontinuance of operations, unless released ear-
11 lier by the director when all statutory requirements have been met.
12 (2) The surety bond shall be executed to the state of Idaho in the sum of
13 fifteen thousand dollars ($15,000) or upon renewal in such larger sum as here-
14 inafter provided. In any case where a licensee or its representatives have
15 failed to account for and pay over moneys accepted, received or held for
16 another in the licensee's conduct of business authorized by this act, a person
17 injured thereby shall have, in addition to all other legal remedies, a right
18 of action in his own name on such bond without the necessity of joining the
19 licensee in such action. The bond shall be continuous in form and shall remain
20 in full force and effect for the license period. The surety may cancel the
21 bond provided that the surety shall in such event provide the licensee and the
22 director with notice no less than thirty (30) days prior to cancellation of
23 the bond. Such notice shall be by registered or certified mail with request
24 for a return receipt and addressed to the licensee at its main office and to
25 the director. In no event shall the liability of the surety for any and all
26 claims against the bond exceed the face amount of such bond.
27 (3) Upon renewal of a license, the licensee shall supply the director
28 with a statement of the moneys accepted, received or held for another in the
29 licensee's conduct of business authorized by this act. The amount of the bond
30 upon renewal shall be in the amount of fifteen thousand dollars ($15,000), or
31 two (2) times the average monthly amount over the preceding year of moneys
32 accepted, received or held for another in the licensee's conduct of business
33 authorized by this act computed to the next highest one thousand dollars
34 ($1,000), whichever sum is greater, up to a maximum of one hundred thousand
35 dollars ($100,000).
36 SECTION 16. That Section 26-2233, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 26-2233. PERMITTEE LICENSEE ACCOUNTS REQUIRED. A permittee shall in its
39 own name:
40 (1) Every licensee under this act that receives or holds funds belonging
41 to another in connection with the business activities authorized by this act
42 shall, in its own name, eEstablish and maintain a separate trust account for
43 deposit and remittance of creditors' such funds in a financial institution,
44 the deposits of which are insured by the federal deposit insurance corpora-
45 tion. A licensee may not, directly or indirectly, misappropriate, misapply or
46 borrow money held in trust.
47 (2) Every licensee under this act shall eEstablish and maintain a sepa-
48 rate business account for the licensee's business funds and moneys in a finan-
49 cial institution, the deposits of which are insured by the federal deposit
50 insurance corporation.
51 SECTION 17. That Section 26-2234, Idaho Code, be, and the same is hereby
52 amended to read as follows:
14
1 26-2234. EXAMINATIONS, INVESTIGATIONS, RECORDS AND PAYMENT OF FUNDS. (1)
2 The director or his duly authorized representatives may make an annual exami-
3 nation, or more frequently in the director's discretion, of the place of
4 licensee's business of each permittee and foreign permittee locations from
5 which activities authorized under this act are conducted, and for that purpose
6 the director shall have free access during normal business hours to the offi-
7 ces and places of business, and to the books, creditors' accounts, trust
8 accounts, business accounts, records, papers, files, safes and vaults of all
9 such permittees used by a licensee for its operations under this act.
10 (2) The director may, upon his own motion, and shall, upon the sworn com-
11 plaint in writing of any person, investigate the action of any person or per-
12 sons claimed to have violated the provisions of this chapter, and conduct pub-
13 lic or private investigations and examinations within or outside of this state
14 which the director considers necessary or appropriate to determine whether a
15 person has violated, is violating, or is about to violate this act or a rule
16 adopted or order issued under this act, or to aid in the enforcement of this
17 act. Ffor that purpose the director shall have free access during normal busi-
18 ness hours to the offices and places of business, and to the books, creditors'
19 accounts, trust accounts, business accounts, records, papers, files, safes and
20 vaults of all such persons used by a licensee for its operations under this
21 act.
22 (3) Every permittee and foreign permittee shall execute to the director
23 an agreement of consent to examination of any and all bank accounts of the
24 permittee providing the director with authority to make such examination at
25 any time the director, in his discretion, deems it to be in the public inter-
26 est.
27 (4) The cost of examination for the first annual examination each year
28 and any investigation shall be paid to the director by each permittee licensee
29 so examined or investigated and the director may maintain an action for the
30 recovery of such costs against the permittee licensee or against the surety
31 providing the bond to indemnify the state for such expenditures as required by
32 this chapter act. The cost shall be fixed annually by the director, but shall
33 not exceed twenty-five fifty dollars ($250.00) per examination hour.
34 (54) Each permittee collection agency licensee shall acknowledge in writ-
35 ing each account received for collection and shall maintain a record of such
36 account, and shall make a permanent record of all sums collected by him and of
37 all disbursements made. by him. Every permittee collection agency licensee
38 shall keep and preserve all records relating to accounts received for collec-
39 tion, collections moneys collected, receipts, and disposal or disbursement of
40 all creditors' funds for a period of five three (53) years after the final
41 disposition of any account. It shall be unlawful for any person to intention-
42 ally make any false entry, omit to make a necessary entry, mutilate, secrete
43 away, destroy or otherwise dispose of any record mentioned referenced in this
44 subsection, provided a record may be disposed of after the five three (53)
45 year period heretofore provided.
46 (65) Every permittee collection agency licensee shall, within thirty (30)
47 days after the close following the end of each calendar month, pay to his
48 creditors the net proceeds of remit to his creditor clients all funds due them
49 resulting from collections made by the permittee licensee during said calendar
50 month. Each permittee shall report to the creditor all collections made by him
51 and/or any payments made to the creditor within thirty (30) days after the
52 close Such licensees shall provide each of their creditor clients a written
53 statement of all moneys collected on behalf of such creditor clients and any
54 payments made to such creditor clients within thirty (30) days following the
55 end of each calendar month.
15
1 (76) Every permittee shall maintain his books and records in accordance
2 with generally accepted accounting practices subject to such rules and regula-
3 tions as adopted by the director Every licensee shall maintain books and
4 records, including financial records in accordance with generally accepted
5 accounting principles, in a manner that will enable the director to determine
6 whether the licensee is complying with the provisions of this act.
7 (87) The director, may impound the creditors' accounts, or trust accounts
8 of any permittee if it shall be deemed in the general public interest
9 accounts, including all operating and trust accounts held in any financial
10 institution, of any licensee or person required to be licensed under this act
11 who receives, holds or disburses consumer funds, if the director deems it in
12 the public interest and good cause exists therefor, in accordance with section
13 67-5247, Idaho Code.
14 SECTION 18. That Section 26-2235, Idaho Code, be, and the same is hereby
15 repealed.
16 SECTION 19. That Section 26-2236, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 26-2236. SUBPOENAS. The director shall have the power to issue subpoenas
19 and bring before him any person, book, or writing in this state as necessary
20 to determine whether a person has violated any provision of this act, rule or
21 order thereunder, to swear witnesses and to take the testimony of any person
22 by deposition, with the same fees and mileage and in the same manner as pre-
23 scribed by law in judicial procedure in district courts of this state in civil
24 cases. Any party to a proposed revocation or suspension of a permit license
25 shall have the right of subpoena to compel the attendance of witnesses and
26 produce all reasonably necessary books and writings on his behalf. In case any
27 witness shall fail or refuse to comply with a subpoena to appear before the
28 director, the clerk of the district court of the county in which the adminis-
29 trative proceedings are held shall, upon demand of the director, issue a sub-
30 poena reciting the demand therefor and summoning the witness to appear and
31 testify at a time and place fixed; and violation of such subpoena or disobedi-
32 ence thereto shall be deemed and punished as a violation of any other a sub-
33 poena issued from by the district court. Any revocation or suspension of any
34 permit or license provided for by this chapter shall be governed by chapter
35 52, title 67, Idaho Code.
36 SECTION 20. That Section 26-2237, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 26-2237. FEES -- DISPOSITION OF FUNDS. All fees provided for in this
39 chapter act shall be paid to the director and by him remitted to the state
40 treasurer pursuant to section 59-1014, Idaho Code, and all such funds shall be
41 deposited to the credit of the finance administrative account in the state
42 dedicated fund.
43 SECTION 21. That Section 26-2238, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 26-2238. VIOLATIONS -- PENALTIES. (1) Any person who shall do business
46 within the state of Idaho as defined in this act, without a permit, or any
47 permit holder engages in activities authorized under this act, who fails to
48 establish and maintain a separate trust account for such creditors' funds for
16
1 each permit which he holds, or fails to make and keep the records as required
2 by under this act, or fails to disburse funds in accordance with the require-
3 ments of this act, or misappropriates, transfers, or converts to his own use
4 or benefit, funds belonging to or held for another person, shall, upon convic-
5 tion, be guilty of a felony and punishable by a fine not exceeding to exceed
6 five thousand dollars ($5,000) per violation or by imprisonment in the state
7 penitentiary for not more than five (5) years, or both, and.
8 (2) Any person, except a person exempt under section 26-2239, Idaho Code,
9 who engages in activities authorized under this act without first obtaining a
10 license as required by this act shall, upon conviction, be guilty of a felony
11 punishable by a fine not to exceed five thousand dollars ($5,000) or by
12 imprisonment for not more than five (5) years, or both.
13 (3) Aany person who shall fail to comply with any of the other provisions
14 of this act shall, upon conviction, be guilty of a misdemeanor.
15 SECTION 22. That Section 26-2239, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 26-2239. EXEMPTIONS. The provisions of this chapter act shall not apply
18 to the following:
19 (1) Any attorney-at-law duly authorized Persons licensed to practice law
20 in this state, to the extent that they are retained by their clients to engage
21 in activities authorized by this act, and such activities are incidental to
22 the practice of law. Such exemption shall not apply to an attorney engaged in
23 a separate business conducting the activities authorized by this act;
24 (2) Any regulated lender as defined in section 28-41-301(37), Idaho Code,
25 nor any and its subsidiary, affiliate or agent of such a regulated lender to
26 the extent that the regulated lender, subsidiary, affiliate or agent collects
27 for the regulated lender or engages in acts governed by this act which are
28 incidental to the business of a regulated lender;
29 (3) Any bank, trust company, credit union, insurance company or indus-
30 trial loan company authorized to do business in this state;
31 (4) Any federal, state or local governmental agency or instrumentality;
32 (5) Any real estate broker or real estate salesman licensed under the
33 laws of and residing within this state when while engaged in the regular prac-
34 tice of a real estate business acts authorized by his real estate license;
35 (6) Any abstract and title companies doing an person authorized to engage
36 in escrow business in this state while engaged in authorized escrow business;
37 (7) Any mortgage company to the extent that such mortgage company is
38 engaged in the regular business of a mortgage company as defined in section
39 26-2802, Idaho Code, except a mortgage company engaged in a separate business
40 conducting the activities authorized by this act;
41 (8) Any court appointed trustee, receiver or conservator;
42 (9) Any telephone corporation, as defined in subsection (10) of section
43 62-603, Idaho Code, whose initial request for payment on behalf of such tele-
44 phone corporation or on behalf of another person is made by the telephone cor-
45 poration as a part of regular telecommunications billings to its customers and
46 at a time before the account, bill, claim or other indebtedness becomes past
47 due or delinquent;
48 (10) Any person while acting as a debt collector for another person, both
49 of whom are related by common ownership or affiliated by corporate control, if
50 the person acting as a debt collector does so only for persons to whom he is
51 so related or affiliated and if the principal business of such person is not
52 the collection of debts.
17
1 SECTION 23. That Section 26-2240, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 26-2240. AGENT IDENTIFICATION -- QUARTERLY NOTICE -- FEE. Each permit
4 holder shall applicant for a license under this act, with its initial license
5 application, and each licensee at annual renewal, shall file with the director
6 a list of all agents including the name of the each agent and any other iden-
7 tifying information the director may require. A fee of twenty dollars ($20.00)
8 for each listed agent shall accompany the list. Each licensee shall notify
9 tThe director shall be notified in writing of any additions to the its agent
10 list no less often than every calendar quarter. A fee of twenty dollars
11 ($20.00) shall be filed with paid to the director for each additionally iden-
12 tified agent in the quarterly notification of additions to a permit holder's
13 licensee's agent list. An agent is not required to be listed, nor the fee paid
14 therefor, unless the agent acted for the permit holder licensee for more than
15 five thirty (530) business days.
16 SECTION 24. That Section 26-2243, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 26-2243. PROPERTY RIGHT IN ACCOUNTS -- PRACTICE OF LAW PROHIBITED. A per-
19 mit holder licensee under this act shall have a property right in any account
20 assigned to it for collection; provided, however, no right herein granted
21 shall authorize such permit holder licensee to engage in the practice of law.
22 SECTION 25. That Section 26-2244, Idaho Code, be, and the same is hereby
23 amended to read as follows:
24 26-2244. CEASE AND DESIST ORDERS, PENALTY. (1) Whenever it appears to the
25 director that it is in the public interest, he may order any person to cease
26 and desist from acts, practices, or omissions which constitute a violation of
27 this chapter act or a rule adopted or an order issued under this act.
28 (2) Whenever, after notice and the opportunity for a hearing, the direc-
29 tor finds that any person has violated engaged in any act, practice, or omis-
30 sion constituting a violation of any provision of this chapter act or a rule
31 adopted or an order issued under this act, the director may order the person
32 to cease and desist from such acts, practices or omissions which constitute a
33 violation of this chapter and:
34 (a) Impose a civil penalty of not more than two thousand five hundred
35 thousand dollars ($2,5005,000) for each violation upon any person found to
36 have violated any provision of this chapter act or a rule adopted or an
37 order issued under this act;
38 (b) Issue an order restoring to any person in interest any consideration
39 that may have been acquired or transferred in violation of this chapter
40 act or a rule adopted or an order issued under this act; or and
41 (c) Issue an order that the person violating this chapter act or a rule
42 adopted or an order issued under this act pay costs, which in the discre-
43 tion of the director may include an amount representing reasonable attor-
44 ney's fees and reimbursement for investigative efforts.
45 SECTION 26. That Section 26-2245, Idaho Code, be, and the same is hereby
46 amended to read as follows:
47 26-2245. DIRECTOR'S POWER TO ENJOIN VIOLATIONS. (1) Whenever it appears
48 to the director that any person, or employee or agent thereof, has engaged in
18
1 or is about to engage in any act or practice or omission constituting a viola-
2 tion of any provision of this chapter act, or any rule or order issued hereun-
3 der, he may in his discretion bring an action in any court of competent juris-
4 diction to enjoin any such acts, or practices or omissions and to enforce com-
5 pliance with this chapter act or any rules adopted or order issued hereunder.
6 Upon a showing that a person, or employee or agent of any person, thereof, has
7 engaged in or is about to engage in an act, or practice or omission constitut-
8 ing a violation of this chapter act or any rule adopted or order issued here-
9 under, a permanent or temporary injunction, or restraining order shall be
10 granted and a receiver or conservator may be appointed, which may be the
11 director, for the defendant's assets. The director shall not be required to
12 furnish a bond.
13 (2) In addition to the foregoing, the director, in his discretion and
14 upon a showing in any court of competent jurisdiction that a person has vio-
15 lated the any provisions of this chapter act or rule adopted or order issued
16 hereunder, may be granted the following additional remedies:
17 (a) An order restoring to any person in interest any consideration that
18 may have been acquired or transferred in violation of this chapter act;
19 (b) An order that the person violating this chapter act, rule or order
20 issued hereunder, pay a civil penalty to the department in an amount not
21 to exceed two thousand five hundred thousand dollars ($2,5005,000) for
22 each violation;
23 (c) An order allowing the director to recover costs, which in the discre-
24 tion of the court may include an amount representing reasonable attorney's
25 fees and reimbursement for investigative efforts; and
26 (d) An order granting other appropriate remedies upon a proper showing.
27 SECTION 27. That Section 26-2246, Idaho Code, be, and the same is hereby
28 repealed.
29 SECTION 28. That Chapter 22, Title 26, Idaho Code, be, and the same is
30 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
31 ignated as Section 26-2246, Idaho Code, and to read as follows:
32 26-2246. CLOSURE OR DISCONTINUANCE OF OPERATIONS -- REQUIREMENTS. (1)
33 Whenever the operations of a collection agency licensee under this act are
34 closed or discontinued due to revocation, termination, or relinquishment of a
35 collection agency license, or for any other reason, the collection agency
36 shall, within thirty (30) days following the closure or discontinuance of
37 operations, furnish the director with sufficient proof in a form to be deter-
38 mined by the director that:
39 (a) The collection agency has remitted to all of its creditor clients all
40 moneys collected on their behalf and due such creditor clients;
41 (b) All collection accounts, judgments obtained, and other accounts have
42 been returned to the creditor clients or other proper parties, and if
43 appropriate, assigned by the collection agency to its creditor clients or
44 other proper parties; and
45 (c) All valuable papers, documents, judgments and other property provided
46 to the collection agency by its creditor clients or other parties in con-
47 nection with the collection agency's collection activities have been
48 returned to the creditor clients or other proper parties.
49 (2) A collection agency which holds a license issued pursuant to this
50 act, upon closure or discontinuance of its operations, shall maintain the
51 bonds required of such licensee to conduct a collection agency business until
52 a final accounting of its affairs, as set forth in subsection (1) of this sec-
19
1 tion, has been filed with and approved by the director.
2 (3) Whenever the operations of a collection agency are closed or discon-
3 tinued as set forth in subsection (1) of this section, in the event the col-
4 lection agency does not complete all requirements of such subsection within
5 thirty (30) days following the closure or discontinuance of operations, upon
6 demand by the director, the collection agency shall permit the director to
7 take possession of its business records, bank accounts, including creditor
8 client trust accounts, other property belonging to its creditor clients or
9 third parties, and its assets. The director may then liquidate the collection
10 agency's business, return any moneys owed to the collection agency's creditor
11 clients, return the collection agency's accounts to its creditor clients,
12 return or assign any judgments to the agency's creditor clients, and take any
13 other actions which are reasonably necessary to cause the collection agency to
14 liquidate its assets and to comply with subsection (1) of this section.
15 (4) If a collection agency refuses to permit the director to take posses-
16 sion of its business records, bank accounts, creditor client trust accounts,
17 other property belonging to its creditor clients or third parties and its
18 assets, as set forth in subsection (3) of this section, the director may apply
19 to a court of competent jurisdiction in the county of the collection agency's
20 principal place of business for the appointment of a receiver or conservator
21 as set forth in section 26-2245(1), Idaho Code. Such receiver or conservator
22 may be the director.
23 (5) The expenses of the receiver or conservator and attorney's fees, and
24 all expenses necessarily incurred in liquidation of the collection agency,
25 shall be paid out of the funds in the control of the director or conservator,
26 to the extent those funds exceed any sums due and owing to the collection
27 agency's creditor clients or other proper parties. To the extent funds in the
28 control of the receiver are not sufficient to pay all sums due and owing to
29 the collection agency's creditor clients or other proper parties and to pay
30 the costs of a receiver or conservator and of liquidation of the collection
31 agency, the collection agency and its owners, shareholders, or interest hold-
32 ers shall be responsible for the balance of any reasonably necessary costs and
33 fees of liquidation.
34 SECTION 29. That Section 26-2248, Idaho Code, be, and the same is hereby
35 amended to read as follows:
36 26-2248. ADMINISTRATION OF ACT. The administration of the provisions of
37 this act shall be under the general supervision and control of the director,
38 subject to chapter 52, title 67, Idaho Code. The director may from time to
39 time make adopt, amend, and rescind such rules, regulations and forms and
40 issue orders necessary to carry out the provisions of this act. No rule, regu-
41 lation or form order may be made unless the director finds that the action is
42 necessary or appropriate for the public interest or for the protection of
43 creditors and debtors the public consistent with the purposes of this act.
44 SECTION 30. That Sections 26-2250 and 26-2251, Idaho Code, be, and the
45 same are hereby repealed.
46 SECTION 31. That Chapter 22, Title 26, Idaho Code, be, and the same is
47 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
48 ignated as Section 26-2251, Idaho Code, and to read as follows:
49 26-2251. SEVERABILITY. The provisions of this act are hereby declared to
50 be severable and if any provision of this act or the application of such pro-
20
1 vision to any person or circumstance is declared invalid for any reason, such
2 declaration shall not affect the validity of the remaining portions of this
3 act.
4 SECTION 32. That Section 1-2301A, Idaho Code, be, and the same is hereby
5 amended to read as follows:
6 1-2301A. DRAWING CHECK WITHOUT FUNDS OR INSUFFICIENT FUNDS -- CIVIL LIA-
7 BILITY. In any action filed in the small claims department against a person
8 who makes any check, draft or order for the payment of money which has been
9 dishonored for lack of funds or credit to pay the same, or because the maker
10 has no account with the drawee, the plaintiff, or a collection agency with a
11 permit license issued to it pursuant to section 26-22295, Idaho Code, which is
12 attempting to collect the dishonored check under a written agreement with the
13 payee or holder of the check, may recover from the defendant the amount of the
14 check, draft or order and, in addition thereto, the greater of the amount of
15 one hundred dollars ($100) or three (3) times the amount for which the check,
16 draft or order is drawn. Except as provided in section 1-2304, Idaho Code, the
17 plaintiff or collection agency may recover no other costs, fees, charges or
18 damages. However, damages recovered under the provisions of this section shall
19 not exceed by more than five hundred dollars ($500) the value of the check,
20 draft or order and may be awarded only if the plaintiff made written demand of
21 the defendant for payment of the amount of the check, draft or order not less
22 than ten (10) days before commencing the action, and if the defendant failed
23 to tender to the plaintiff, prior to commencement of the action, an amount of
24 money not less than the amount demanded. The written demand required by this
25 section shall be sent to the maker by certified mail at his last known
26 address, or by regular mail, supported by an affidavit of service by mailing,
27 to the address printed or written on the check as provided in section
28 28-22-106, Idaho Code, in which case the demand shall be deemed conclusive
29 three (3) days following the date the affidavit is executed. The written
30 demand shall fully advise the maker of the check, draft, or order of the con-
31 sequences of failure to make prompt payment under this section. The plaintiff
32 or collection agency must show proof of service by producing a copy of a
33 signed return receipt or affidavit of personal service.
STATEMENT OF PURPOSE
RS 17430C1
The purpose of this bill is to amend the Idaho Collection Agency
Act to establish uniformity of licensing requirements for
collection agencies operating in Idaho, whether based in or
outside of this state. This would be accomplished largely by
eliminating an in-state office requirement and replacing a
testing requirement administered in Idaho with an experience
requirement for office managers. This bill would also (i)
repeal an outdated net worth requirement, (ii) amend a quarterly
fee and reporting requirement so that it will apply only to
solicitors/agents employed by licensees for thirty (30) days in
place of the current five (5) day requirement. The bill
clarifies that an existing $20 annual fee applies to the
solicitors/agents of licensees operating in Idaho, whether based
in or outside of this state. The bill would also eliminate one
of two bonds currently required under the Collection Agency Act.
The bill also includes a definition of credit repair
organizations and imposes requirements and restrictions. The
bill also repeals the requirement that credit and debt
counselors be non-profit 501 (c)(3) charitable organizations
under the Internal Revenue Code.
FISCAL NOTE
It is anticipated that some increase in revenue may result from
payment by all licensees, whether based in or outside of this
state, of the $20 annual solicitor/agent fee. However, this
increase could largely be offset by extending the time period
from five (5) days to thirty (30) days for solicitor/agent fees
to be paid. An increase in revenue is also anticipated to
result from an increase in licensing fees of approximately
$35,000 annually based on the number of current licensees.
CONTACT
Name: Michael Larsen
Agency: Finance, Dept. of
Phone: (208) 332-8060
STATEMENT OF PURPOSE/FISCAL NOTE H 451