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H0071........................................................by MR. SPEAKER
Requested by Department of Finance
COLLECTION AGENCIES - Amends existing law to increase the amount of the
bond required for collection agencies from $5,000 to $15,000.
01/11 House intro - 1st rdg - to printing
01/11 Rpt prt - to Bus
H0071|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 71 BY MR. SPEAKER Requested by: Department of Finance 1 AN ACT 2 RELATING TO BONDS OF COLLECTION AGENCIES; AMENDING SECTION 26-2232, IDAHO 3 CODE, TO INCREASE THE AMOUNT OF THE BOND EXECUTED TO THE STATE OF IDAHO 4 FROM FIVE TO FIFTEEN THOUSAND DOLLARS AND TO MAKE A TECHNICAL CORRECTION. 5 Be It Enacted by the Legislature of the State of Idaho: 6 SECTION 1. That Section 26-2232, Idaho Code, be, and the same is hereby 7 amended to read as follows: 8 26-2232. BONDS. Upon approval of the application and prior to the issu- 9 ance of the permit the applicant must file in the department of finance two 10 (2) bonds. Both bonds shall be in a form provided by the attorney general of 11 this state, and shall be executed by the applicant as principal and by some 12 surety company authorized to do business in this state as surety, and shall be 13 for the term of any permit issued to the applicant. Each permittee shall be 14 required to have the two (2) bonds for each permit as hereinafter provided. In 15 lieu of the bonds required by this section, a certificate of deposit issued by 16 an Idaho bank and made payable to the director may be provided to the director 17 in the same principal amount as required for bonds. The interest on the cer- 18 tificate of deposit shall be payable to the permittee. The certificate of 19 deposit shall be maintained at all times during which the permittee is autho- 20 rized to do business under Idaho law, and must provide that it will remain in 21 effect for at least three (3) years following discontinuance of operations, 22 unless released earlier by the director when all statutory requirements have 23 been met. 24 (a) A bond shall be executed to the state of Idaho in the sum of25fivefifteen thousand dollars ($ 1 5,000) or 26 upon renewal in such larger sum as hereinafter provided. In any case where a 27 permittee or its representatives has failed to account for and pay over the 28 proceeds of any collection made or money received for payment or prorating to 29 creditors, or has failed to return to a debtor any sum received that was not 30 to be applied to his debts, the creditor or debtor shall have in addition to 31 all other legal remedies a right of action in his own name on such bond with- 32 out the necessity of joining the permittee in such action. The bond shall be 33 continuous in form and shall remain in full force and effect for the permit 34 period. The surety may cancel the bond provided that the surety shall in such 35 event provide the permittee and thecommissionerdirector 36 with notice thirty (30) days prior to cancelation of said bond. Such 37 notice shall be by registered or certified mail with request for a return 38 receipt and addressed to the permittee at its main office and to the director. 39 In no event shall the liability of the surety for any and all claims against 40 the bond exceed the face amount of such bond. 41 Upon renewal of any permit, the permittee shall supply the director with a 42 statement of the preceding year's net collections. The amount of the bond upon 43 renewal shall be in the amount of five thousand dollars ($5,000), or two (2) 2 1 times the average monthly net collections for the preceding year computed to 2 the next highest one thousand dollars ($1,000), whichever sum is greater, up 3 to a maximum of one hundred thousand dollars ($100,000). 4 (b) A bond shall be executed to the state of Idaho in the sum of two 5 thousand dollars ($2,000), which shall be limited to the indemnification of 6 the department of finance for any and all expenses incurred as a result of 7 investigations, administrative proceedings, and prosecutions which shall be 8 instituted by the director against a permittee or licensee pursuant to this 9 act. The bond shall be continuous in form and remain in full force and effect 10 and run concurrently with the permit period and any renewal thereof. The 11 surety may cancel the bond provided that the surety shall in such event pro- 12 vide the permittee and the director with notice thirty (30) days prior to 13 cancelation of said bond. Such notice shall be registered or certified mail 14 with request for a return receipt and addressed to the permittee at its main 15 office and to the director. In no event shall the liability of the surety for 16 any and all claims against the bond exceed the face amount of such bond.
STATEMENT OF PURPOSE
RS08425
This legislation amends the Idaho Collection Agency Act to increase
the amount of the bond required (from $5,000 to $15,000) in order
to afford greater protection to collection agency customers.
FISCAL IMPACT
None.
CONTACT
Name: Kelly Robison
Agency: Idaho Department of Finance
Phone: 332-8032
Statement of Purpose/Fiscal Impact H 7