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S1288aa.....................................by COMMERCE AND HUMAN RESOURCES
COLLECTION AGENCIES - Amends existing law relating to collection agencies
to revise a definition; to revise prohibited conduct; to revise the
requirements for permit applications; to require that an application for
renewal of a permit be postmarked on or before a certain date; to provide
for the cost of examinations; to provide for certain cease and desist
orders; to increase the monetary civil penalty; to provide additional civil
penalties; to extend the director's authority to bring an action to enjoin
certain violations; to provide for additional remedies; and to clarify the
effective date of permit cancellation.
01/16 Senate intro - 1st rdg - to printing
01/17 Rpt prt - to Com/HuRes
01/24 Rpt out - to 14th Ord
02/08 Rpt out amen - to engros
02/11 Rpt engros - 1st rdg - to 2nd rdg as amen
02/12 2nd rdg - to 3rd rdg as amen
02/13 3rd rdg as amen - PASSED - 34-0-1
AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Bunderson,
Burtenshaw, Darrington, Davis, Deide, Dunklin, Frasure, Geddes,
Goedde, Hawkins, Hill, Ingram, Ipsen, Keough, King-Barrutia, Little,
Lodge, Marley, Noh, Richardson, Risch, Sandy, Schroeder, Sims,
Sorensen, Stegner, Stennett, Thorne, Wheeler, Williams
NAYS -- None
Absent and excused -- Cameron
Floor Sponsor - Brandt
Title apvd - to House
02/14 House intro - 1st rdg - to Bus
02/28 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/06 3rd rdg - PASSED - 58-2-10
AYES -- Aikele, Barraclough, Barrett, Bell, Bieter, Black, Block,
Boe, Bolz, Bradford, Bruneel, Callister, Campbell, Clark, Collins,
Crow, Cuddy, Denney, Ellsworth, Eskridge, Field(13), Field(20),
Gould, Hadley, Hammond, Henbest, Higgins, Hornbeck, Jaquet, Jones,
Kellogg(Duncan), Kendell, Kunz, Lake, Langford, Loertscher, Mader,
Martinez, Montgomery, Mortensen, Moyle, Pearce, Pischner, Pomeroy,
Raybould, Roberts, Robison, Sali, Schaefer, Sellman, Shepherd,
Smith(33), Smith(23), Smylie, Stevenson, Stone, Tilman, Wheeler
NAYS -- Harwood, McKague
Absent and excused -- Bedke, Deal, Ellis, Gagner, Meyer, Ridinger,
Trail, Wood, Young, Mr. Speaker
Floor Sponsor - Smith(33)
Title apvd - to Senate
03/07 To enrol
03/08 Rpt enrol - Pres signed
03/11 Sp signed
03/12 To Governor
03/21 Governor signed
Session Law Chapter 190
Effective: 07/01/02
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE SENATE
SENATE BILL NO. 1288
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO COLLECTION AGENCIES; AMENDING SECTION 26-2222, IDAHO CODE, TO
3 REVISE A DEFINITION AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
4 26-2223, IDAHO CODE, TO REVISE CONDUCT PROHIBITED ABSENT COMPLIANCE WITH
5 THE PROVISIONS OF CHAPTER 22, TITLE 26, IDAHO CODE, AND OBTAINMENT OF A
6 PERMIT FROM THE DIRECTOR OF THE DEPARTMENT OF FINANCE AND TO MAKE A TECH-
7 NICAL CORRECTION; AMENDING SECTION 26-2224, IDAHO CODE, TO REVISE THE
8 REQUIREMENTS FOR PERMIT APPLICATIONS AND TO MAKE TECHNICAL CORRECTIONS;
9 AMENDING SECTION 26-2231, IDAHO CODE, TO REQUIRE THAT AN APPLICATION FOR
10 RENEWAL OF A PERMIT BE POSTMARKED ON OR BEFORE A CERTAIN DATE AND TO MAKE
11 TECHNICAL CORRECTIONS; AMENDING SECTION 26-2244, IDAHO CODE, TO PROVIDE
12 FOR CERTAIN CEASE AND DESIST ORDERS, TO INCREASE THE MONETARY CIVIL PEN-
13 ALTY THAT MAY BE IMPOSED BY THE DIRECTOR AND TO PROVIDE ADDITIONAL CIVIL
14 PENALTIES THAT MAY BE IMPOSED; AMENDING SECTION 26-2245, IDAHO CODE, TO
15 EXTEND THE DIRECTOR'S AUTHORITY TO BRING AN ACTION TO ENJOIN CERTAIN
16 VIOLATIONS TO VIOLATIONS OF ORDERS ISSUED PURSUANT TO CHAPTER 22, TITLE
17 26, IDAHO CODE, TO PROVIDE FOR ADDITIONAL REMEDIES THAT MAY BE GRANTED TO
18 THE DIRECTOR AND TO MAKE TECHNICAL CORRECTIONS; AND AMENDING SECTION
19 26-2251, IDAHO CODE, TO CLARIFY THE EFFECTIVE DATE OF PERMIT CANCELLATION
20 FOR ANY PERMITTEE FAILING TO APPLY FOR RENEWAL OF A PERMIT IN A TIMELY
21 MANNER AND TO MAKE TECHNICAL CORRECTIONS.
22 Be It Enacted by the Legislature of the State of Idaho:
23 SECTION 1. That Section 26-2222, Idaho Code, be, and the same is hereby
24 amended to read as follows:
25 26-2222. DEFINITIONS. As used in this chapter:
26 (1) "Agent" means any person who is compensated on a commission basis or
27 by salary, or both, by any permittee and who either contacts debtors or credi-
28 tors in connection with the collection agency business of the permittee.
29 (2) "Business funds" means all moneys belonging to or due the permittee
30 in connection with the operation of a collection agency business.
31 (3) "Collection agency," "collection bureau" or "collection office" shall
32 be a person who engages in any of the activities enumerated in section
33 26-2223, Idaho Code.
34 (4) "Director" means the director of the department of finance.
35 (5) "Creditor" means any person who transfers to a permittee accounts due
36 and owing for collection purposes.
37 (6) "Creditors' account" means all funds due and owing a creditor within
38 the definition of this chapter.
39 (7) "Net collections" means all funds that are due to creditors from the
40 permittee pursuant to the contract between the permittee and creditor, or per-
41 mittee and debtor without taking into account any offset or funds due from the
42 creditor to the permittee, because of the creditor having collected any part
43 of the account due, plus all funds that the permittee agreed to return to
2
1 debtors or that were not to be applied to debts.
2 (8) "Permittee" means a person who has a permit to do business as a col-
3 lection agency, or debt counselor, or credit counselor in Idaho.
4 (9) "Person" means any permittee, agent, solicitor, individual, corpora-
5 tion, association, copartnership, trust, company or unincorporated organiza-
6 tion.
7 (10) "Debt counselor" means any person engaged in any of the activities
8 enumerated in subsection (6) of section 26-2223, Idaho Code.
9 (11) "Credit counselor" means any person engaged in any of the activities
10 enumerated in subsections (6) and or (7) of section 26-2223, Idaho Code.,
11 which is exempt from federal income taxes as provided in No credit counselor
12 shall be granted a permit pursuant to this chapter unless qualified as an
13 exempt organization under section 501(c)(3) of the iInternal rRevenue cCode.
14 SECTION 2. That Section 26-2223, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 26-2223. COLLECTION AGENCY, DEBT COUNSELOR, OR CREDIT COUNSELOR PERMITS.
17 No person shall without complying with the terms of this act chapter and
18 obtaining a permit from the director:
19 (1) Operate as a collection agency, collection bureau, collection office,
20 debt counselor, or credit counselor in this state.
21 (2) Engage, either directly or indirectly in this state in the business
22 of collecting or receiving payment for others of any account, bill, claim or
23 other indebtedness.
24 (3) Solicit or advertise for the right to collect or receive payment for
25 another of any account, bill, claim or other indebtedness.
26 (4) Sell or otherwise distribute any system or systems of collection let-
27 ters and similar printed matter where the name of any person other than the
28 particular creditor to whom the debt is owed appears.
29 (5) Engage in any activity which indicates, directly or indirectly, that
30 a third party may be involved in effecting any collections.
31 (6) Engage or offer to engage in the business of receiving money from
32 debtors for application to or payment of or prorating of any creditor or cred-
33 itors of such debtor.
34 (7) Engage or offer to engage for compensation in the business of credit
35 providing counseling or other services to debtors in the management of their
36 debts, and contracting with the debtor to effect the adjustment, compromise,
37 or discharge of any account, note or other indebtedness of the debtor.
38 (8) Engage or offer to engage in the business of credit repair which
39 includes obtaining, for others, improvements in credit records, extensions of
40 credit for clients, or causing the removal of documents from the credit
41 records of a client maintained by a credit reporting agency.
42 (9) Engage or offer to engage in this state, directly or indirectly, in
43 the business of collecting any form of indebtedness for that person's own
44 account if the indebtedness was acquired from another person and if the
45 indebtedness was either delinquent or in default at the time it was acquired.
46 SECTION 3. That Section 26-2224, Idaho Code, be, and the same is hereby
47 amended to read as follows:
48 26-2224. FORM OF APPLICATION. Every applicant for such permit shall file
49 in the department of finance an application in form to be prescribed by the
50 director setting forth:
51 (1) The name of the applicant if an individual; if the applicant is a
3
1 corporation a list of its officers and directors and their addresses.; iIf the
2 applicant is a partnership, then a list of the members of said partnership and
3 their addresses; must be filed with the application or if the applicant is a
4 limited liability company a list of its members or managers and their
5 addresses. Every partnership in its application for a permit corporation shall
6 designate and appoint one (1) or more of its members officers or employees,
7 and every corporation in its application for a permit partnership shall desig-
8 nate and appoint one (1) or more of its officers or employees partners, and
9 every limited liability company shall designate and appoint one (1) or more of
10 its members or managers who shall submit to the examination hereinafter
11 required. No permit shall be issued to any corporation, partnership or corpo-
12 ration or limited liability company unless and until the persons and officers
13 so designated by the partnership or corporation shall submit to and pass the
14 examination required by this act chapter.
15 (2) The location of the principal office or place of business of the
16 applicant.
17 (3) Other names, if any, by which the applicant conducts, engages in or
18 solicits business.
19 (4) The names of all persons and organizations with which the applicant
20 is affiliated in such business, and the location of the principal office or
21 place of business of each such affiliation.
22 (5) A complete description of the business to be conducted, or plan of
23 operation contemplated, by the applicant in this state.
24 (6) A list of all papers and filings used by the applicant which must
25 accompany the application and be identified as exhibits by number.
26 (7) A financial statement showing the applicant to have a financial net
27 worth of not less than two thousand five hundred dollars ($2,500), which
28 statement shall be subject to disclosure according to chapter 3, title 9,
29 Idaho Code. The financial statement shall specify assets and liabilities, pro-
30 viding detailed reference to each item listed to inform the director of the
31 nature and extent of such assets and liabilities. This financial statement
32 shall be signed by the applicant or its proper agent. The net worth shall not
33 include any notes, accounts, bills, and judgments held for collection by the
34 applicant nor shall it include good will or other assets the value of which is
35 speculative and not susceptible to prompt liquidation.
36 (8) Such other information concerning the applicant's business as the
37 director may reasonably require. Such application shall be executed and veri-
38 fied by the applicant or applicants personally, or by the president or secre-
39 tary where an individual associated with the applicant is an association or
40 corporation as designated by the director.
41 SECTION 4. That Section 26-2231, Idaho Code, be, and the same is hereby
42 amended to read as follows:
43 26-2231. RENEWAL OF PERMIT. Upon application made prior to postmarked on
44 or before the fifteenth day of March of each year, the holder of any permit
45 issued under the provisions of this act chapter shall be entitled to have such
46 permit renewed for the succeeding calendar year upon payment of the annual
47 permit fee as fixed by the director, but not to exceed fifty dollars ($50.00),
48 compliance with the bond requirements of this act chapter, the filing of a
49 financial statement in the form required by section 26-2224(7), Idaho Code,
50 showing a net worth of at least two thousand five hundred dollars ($2,500) for
51 each place of business for which a permit is sought, filing of all other docu-
52 ments required by section 26-2224, Idaho Code, and approval by the director of
53 all literature to be employed by the permittee during the course of the busi-
4
1 ness year, except no annual permit renewal fee need be paid by a nonprofit
2 corporation or association conducting credit counseling or debt prorating
3 activities.
4 SECTION 5. That Section 26-2244, Idaho Code, be, and the same is hereby
5 amended to read as follows:
6 26-2244. CEASE AND DESIST ORDERS, PENALTY. (1) Whenever it appears to the
7 director that it is in the public interest, he may order any person to cease
8 and desist from acts, practices, or omissions which constitute a violation of
9 this chapter.
10 (2) Whenever, after notice and a hearing, the director finds that any
11 person has violated any provision of this chapter, the director may order the
12 person to cease and desist from acts, practices or omissions which constitute
13 a violation of this chapter and:
14 (a) Iimpose a civil penalty of not more than one two thousand five hun-
15 dred dollars ($1,02,500) for each violation upon any person found to have
16 violated any provision of this chapter;
17 (b) Issue an order restoring to any person in interest any consideration
18 that may have been acquired or transferred in violation of this chapter;
19 or
20 (c) Issue an order that the person violating this chapter pay costs,
21 which in the discretion of the director may include an amount representing
22 reasonable attorney's fees and reimbursement for investigative efforts.
23 SECTION 6. That Section 26-2245, Idaho Code, be, and the same is hereby
24 amended to read as follows:
25 26-2245. DIRECTOR'S POWER TO ENJOIN VIOLATIONS. (1) Whenever it appears
26 to the director that any person, or employee or agent thereof, has engaged in
27 or is about to engage in any act or practice or omission constituting a viola-
28 tion of any provision of this act chapter, or any rule or order hereunder, he
29 may in his discretion bring an action in any court of competent jurisdiction
30 to enjoin any such acts or practices and to enforce compliance with this act
31 chapter or any rules hereunder. Upon a showing that a person, or employee or
32 agent of any person, has engaged in or is about to engage in an act or prac-
33 tice constituting a violation of this act chapter or any rule or order hereun-
34 der, a permanent or temporary injunction, or restraining order shall be
35 granted and a receiver or conservator may be appointed for the defendant's
36 assets. The director shall not be required to furnish bond.
37 (2) In addition to the foregoing, the director, in his discretion and
38 upon a showing in any court of competent jurisdiction that a person has vio-
39 lated the provisions of this chapter or rule or order hereunder, may be
40 granted the following additional remedies:
41 (a) An order restoring to any person in interest any consideration that
42 may have been acquired or transferred in violation of this chapter;
43 (b) An order that the person violating this chapter, rule or order here-
44 under, pay a civil penalty to the department in an amount not to exceed
45 two thousand five hundred dollars ($2,500) for each violation;
46 (c) An order allowing the director to recover costs, which in the discre-
47 tion of the court may include an amount representing reasonable attorney's
48 fees and reimbursement for investigative efforts;
49 (d) An order granting other appropriate remedies upon a proper showing.
50 SECTION 7. That Section 26-2251, Idaho Code, be, and the same is hereby
5
1 amended to read as follows:
2 26-2251. CANCELLATION OF PERMIT. Any permittee or foreign permittee fail-
3 ing to apply in a timely manner for renewal of a permit shall have said permit
4 cancelled on canceled effective the day following the last day for renewal
5 applications to be filed. Engaging in collection agency business with a can-
6 celled canceled permit shall be a violation of the provisions of this chapter.
7 To restore a cancelled canceled permit the fee shall be two hundred dollars
8 ($200). A cancelled canceled permit may be restored only before the expiration
9 of six (6) months following the date of annual renewal.
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
Moved by Davis
Seconded by Brandt
IN THE SENATE
SENATE AMENDMENT TO S.B. NO. 1288
1 AMENDMENTS TO THE BILL
2 On page 4 of the printed bill, following line 3, insert:
3 "SECTION 5. That Section 26-2234, Idaho Code, be, and the same is hereby
4 amended to read as follows:
5 26-2234. INVESTIGATIONS, RECORDS AND PAYMENT OF FUNDS. (1) The director
6 or his duly authorized representatives may make an annual examination, or more
7 frequently in the director's discretion, of the place of business of each per-
8 mittee and foreign permittee and for that purpose the director shall have free
9 access to the offices and places of business, books, creditors' accounts,
10 trust accounts, business accounts, records, papers, files, safes and vaults of
11 all such permittees.
12 (2) The director may, upon his own motion, and shall, upon the sworn com-
13 plaint in writing of any person, investigate the action of any person or per-
14 sons claimed to have violated the provisions of this chapter, and for that
15 purpose the director shall have free access to the offices and places of busi-
16 ness, books, creditors' accounts, trust accounts, business accounts, records,
17 papers, files, safes and vaults of all such persons.
18 (3) Every permittee and foreign permittee shall execute to the director
19 an agreement of consent to examination of any and all bank accounts of the
20 permittee providing the director with authority to make such examination at
21 any time the director, in his discretion, deems it to be in the public inter-
22 est.
23 (4) The actual cost of examination for the first annual examination each
24 year and any investigation shall be paid to the director by each permittee so
25 examined or investigated and the director may maintain an action for the
26 recovery of such costs against the permittee or against the surety providing
27 the bond to indemnify the state for such expenditures as required by this
28 chapter. The cost shall be fixed annually by the director, but shall not
29 exceed twenty-five dollars ($25.00) per examination hour.
30 (5) Each permittee shall acknowledge in writing each account received for
31 collection and shall maintain a record of such account, make a permanent
32 record of all sums collected by him and of all disbursements made by him.
33 Every permittee shall keep and preserve all records relating to accounts
34 received for collection, collections, receipts, and disposal or disbursement
35 of all creditors' funds for a period of five (5) years after the final dispo-
36 sition of any account. It shall be unlawful for any person to intentionally
37 make any false entry, omit to make a necessary entry, mutilate, secrete away,
38 destroy or otherwise dispose of any record mentioned in this subsection, pro-
39 vided a record may be disposed of after the five (5) year period heretofore
40 provided.
41 (6) Every permittee shall, within thirty (30) days after the close of
42 each calendar month, pay to his creditors the net proceeds of all collections
2
1 made by the permittee during said calendar month. Each permittee shall report
2 to the creditor all collections made by him and/or any payments made to the
3 creditor within thirty (30) days after the close of each calendar month.
4 (7) Every permittee shall maintain his books and records in accordance
5 with generally accepted accounting practices subject to such rules and regula-
6 tions as adopted by the director.
7 (8) The director, may impound the creditors' accounts, or trust accounts
8 of any permittee if it shall be deemed in the general public interest."; and
9 renumber subsequent sections accordingly.
10 CORRECTION TO TITLE
11 On page 1, in line 11, following "CORRECTIONS;" insert: "AMENDING SECTION
12 26-2234, IDAHO CODE, TO PROVIDE FOR COST OF EXAMINATIONS;".
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE SENATE
SENATE BILL NO. 1288, As Amended
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO COLLECTION AGENCIES; AMENDING SECTION 26-2222, IDAHO CODE, TO
3 REVISE A DEFINITION AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
4 26-2223, IDAHO CODE, TO REVISE CONDUCT PROHIBITED ABSENT COMPLIANCE WITH
5 THE PROVISIONS OF CHAPTER 22, TITLE 26, IDAHO CODE, AND OBTAINMENT OF A
6 PERMIT FROM THE DIRECTOR OF THE DEPARTMENT OF FINANCE AND TO MAKE A TECH-
7 NICAL CORRECTION; AMENDING SECTION 26-2224, IDAHO CODE, TO REVISE THE
8 REQUIREMENTS FOR PERMIT APPLICATIONS AND TO MAKE TECHNICAL CORRECTIONS;
9 AMENDING SECTION 26-2231, IDAHO CODE, TO REQUIRE THAT AN APPLICATION FOR
10 RENEWAL OF A PERMIT BE POSTMARKED ON OR BEFORE A CERTAIN DATE AND TO MAKE
11 TECHNICAL CORRECTIONS; AMENDING SECTION 26-2234, IDAHO CODE, TO PROVIDE
12 FOR COST OF EXAMINATIONS; AMENDING SECTION 26-2244, IDAHO CODE, TO PROVIDE
13 FOR CERTAIN CEASE AND DESIST ORDERS, TO INCREASE THE MONETARY CIVIL PEN-
14 ALTY THAT MAY BE IMPOSED BY THE DIRECTOR AND TO PROVIDE ADDITIONAL CIVIL
15 PENALTIES THAT MAY BE IMPOSED; AMENDING SECTION 26-2245, IDAHO CODE, TO
16 EXTEND THE DIRECTOR'S AUTHORITY TO BRING AN ACTION TO ENJOIN CERTAIN
17 VIOLATIONS TO VIOLATIONS OF ORDERS ISSUED PURSUANT TO CHAPTER 22, TITLE
18 26, IDAHO CODE, TO PROVIDE FOR ADDITIONAL REMEDIES THAT MAY BE GRANTED TO
19 THE DIRECTOR AND TO MAKE TECHNICAL CORRECTIONS; AND AMENDING SECTION
20 26-2251, IDAHO CODE, TO CLARIFY THE EFFECTIVE DATE OF PERMIT CANCELLATION
21 FOR ANY PERMITTEE FAILING TO APPLY FOR RENEWAL OF A PERMIT IN A TIMELY
22 MANNER AND TO MAKE TECHNICAL CORRECTIONS.
23 Be It Enacted by the Legislature of the State of Idaho:
24 SECTION 1. That Section 26-2222, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 26-2222. DEFINITIONS. As used in this chapter:
27 (1) "Agent" means any person who is compensated on a commission basis or
28 by salary, or both, by any permittee and who either contacts debtors or credi-
29 tors in connection with the collection agency business of the permittee.
30 (2) "Business funds" means all moneys belonging to or due the permittee
31 in connection with the operation of a collection agency business.
32 (3) "Collection agency," "collection bureau" or "collection office" shall
33 be a person who engages in any of the activities enumerated in section
34 26-2223, Idaho Code.
35 (4) "Director" means the director of the department of finance.
36 (5) "Creditor" means any person who transfers to a permittee accounts due
37 and owing for collection purposes.
38 (6) "Creditors' account" means all funds due and owing a creditor within
39 the definition of this chapter.
40 (7) "Net collections" means all funds that are due to creditors from the
41 permittee pursuant to the contract between the permittee and creditor, or per-
42 mittee and debtor without taking into account any offset or funds due from the
43 creditor to the permittee, because of the creditor having collected any part
2
1 of the account due, plus all funds that the permittee agreed to return to
2 debtors or that were not to be applied to debts.
3 (8) "Permittee" means a person who has a permit to do business as a col-
4 lection agency, or debt counselor, or credit counselor in Idaho.
5 (9) "Person" means any permittee, agent, solicitor, individual, corpora-
6 tion, association, copartnership, trust, company or unincorporated organiza-
7 tion.
8 (10) "Debt counselor" means any person engaged in any of the activities
9 enumerated in subsection (6) of section 26-2223, Idaho Code.
10 (11) "Credit counselor" means any person engaged in any of the activities
11 enumerated in subsections (6) and or (7) of section 26-2223, Idaho Code.,
12 which is exempt from federal income taxes as provided in No credit counselor
13 shall be granted a permit pursuant to this chapter unless qualified as an
14 exempt organization under section 501(c)(3) of the iInternal rRevenue cCode.
15 SECTION 2. That Section 26-2223, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 26-2223. COLLECTION AGENCY, DEBT COUNSELOR, OR CREDIT COUNSELOR PERMITS.
18 No person shall without complying with the terms of this act chapter and
19 obtaining a permit from the director:
20 (1) Operate as a collection agency, collection bureau, collection office,
21 debt counselor, or credit counselor in this state.
22 (2) Engage, either directly or indirectly in this state in the business
23 of collecting or receiving payment for others of any account, bill, claim or
24 other indebtedness.
25 (3) Solicit or advertise for the right to collect or receive payment for
26 another of any account, bill, claim or other indebtedness.
27 (4) Sell or otherwise distribute any system or systems of collection let-
28 ters and similar printed matter where the name of any person other than the
29 particular creditor to whom the debt is owed appears.
30 (5) Engage in any activity which indicates, directly or indirectly, that
31 a third party may be involved in effecting any collections.
32 (6) Engage or offer to engage in the business of receiving money from
33 debtors for application to or payment of or prorating of any creditor or cred-
34 itors of such debtor.
35 (7) Engage or offer to engage for compensation in the business of credit
36 providing counseling or other services to debtors in the management of their
37 debts, and contracting with the debtor to effect the adjustment, compromise,
38 or discharge of any account, note or other indebtedness of the debtor.
39 (8) Engage or offer to engage in the business of credit repair which
40 includes obtaining, for others, improvements in credit records, extensions of
41 credit for clients, or causing the removal of documents from the credit
42 records of a client maintained by a credit reporting agency.
43 (9) 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 SECTION 3. That Section 26-2224, Idaho Code, be, and the same is hereby
48 amended to read as follows:
49 26-2224. FORM OF APPLICATION. Every applicant for such permit shall file
50 in the department of finance an application in form to be prescribed by the
51 director setting forth:
3
1 (1) The name of the applicant if an individual; if the applicant is a
2 corporation a list of its officers and directors and their addresses.; iIf the
3 applicant is a partnership, then a list of the members of said partnership and
4 their addresses; must be filed with the application or if the applicant is a
5 limited liability company a list of its members or managers and their
6 addresses. Every partnership in its application for a permit corporation shall
7 designate and appoint one (1) or more of its members officers or employees,
8 and every corporation in its application for a permit partnership shall desig-
9 nate and appoint one (1) or more of its officers or employees partners, and
10 every limited liability company shall designate and appoint one (1) or more of
11 its members or managers who shall submit to the examination hereinafter
12 required. No permit shall be issued to any corporation, partnership or corpo-
13 ration or limited liability company unless and until the persons and officers
14 so designated by the partnership or corporation shall submit to and pass the
15 examination required by this act chapter.
16 (2) The location of the principal office or place of business of the
17 applicant.
18 (3) Other names, if any, by which the applicant conducts, engages in or
19 solicits business.
20 (4) The names of all persons and organizations with which the applicant
21 is affiliated in such business, and the location of the principal office or
22 place of business of each such affiliation.
23 (5) A complete description of the business to be conducted, or plan of
24 operation contemplated, by the applicant in this state.
25 (6) A list of all papers and filings used by the applicant which must
26 accompany the application and be identified as exhibits by number.
27 (7) A financial statement showing the applicant to have a financial net
28 worth of not less than two thousand five hundred dollars ($2,500), which
29 statement shall be subject to disclosure according to chapter 3, title 9,
30 Idaho Code. The financial statement shall specify assets and liabilities, pro-
31 viding detailed reference to each item listed to inform the director of the
32 nature and extent of such assets and liabilities. This financial statement
33 shall be signed by the applicant or its proper agent. The net worth shall not
34 include any notes, accounts, bills, and judgments held for collection by the
35 applicant nor shall it include good will or other assets the value of which is
36 speculative and not susceptible to prompt liquidation.
37 (8) Such other information concerning the applicant's business as the
38 director may reasonably require. Such application shall be executed and veri-
39 fied by the applicant or applicants personally, or by the president or secre-
40 tary where an individual associated with the applicant is an association or
41 corporation as designated by the director.
42 SECTION 4. That Section 26-2231, Idaho Code, be, and the same is hereby
43 amended to read as follows:
44 26-2231. RENEWAL OF PERMIT. Upon application made prior to postmarked on
45 or before the fifteenth day of March of each year, the holder of any permit
46 issued under the provisions of this act chapter shall be entitled to have such
47 permit renewed for the succeeding calendar year upon payment of the annual
48 permit fee as fixed by the director, but not to exceed fifty dollars ($50.00),
49 compliance with the bond requirements of this act chapter, the filing of a
50 financial statement in the form required by section 26-2224(7), Idaho Code,
51 showing a net worth of at least two thousand five hundred dollars ($2,500) for
52 each place of business for which a permit is sought, filing of all other docu-
53 ments required by section 26-2224, Idaho Code, and approval by the director of
4
1 all literature to be employed by the permittee during the course of the busi-
2 ness year, except no annual permit renewal fee need be paid by a nonprofit
3 corporation or association conducting credit counseling or debt prorating
4 activities.
5 SECTION 5. That Section 26-2234, Idaho Code, be, and the same is hereby
6 amended to read as follows:
7 26-2234. INVESTIGATIONS, RECORDS AND PAYMENT OF FUNDS. (1) The director
8 or his duly authorized representatives may make an annual examination, or more
9 frequently in the director's discretion, of the place of business of each per-
10 mittee and foreign permittee and for that purpose the director shall have free
11 access to the offices and places of business, books, creditors' accounts,
12 trust accounts, business accounts, records, papers, files, safes and vaults of
13 all such permittees.
14 (2) The director may, upon his own motion, and shall, upon the sworn com-
15 plaint in writing of any person, investigate the action of any person or per-
16 sons claimed to have violated the provisions of this chapter, and for that
17 purpose the director shall have free access to the offices and places of busi-
18 ness, books, creditors' accounts, trust accounts, business accounts, records,
19 papers, files, safes and vaults of all such persons.
20 (3) Every permittee and foreign permittee shall execute to the director
21 an agreement of consent to examination of any and all bank accounts of the
22 permittee providing the director with authority to make such examination at
23 any time the director, in his discretion, deems it to be in the public inter-
24 est.
25 (4) The actual cost of examination for the first annual examination each
26 year and any investigation shall be paid to the director by each permittee so
27 examined or investigated and the director may maintain an action for the
28 recovery of such costs against the permittee or against the surety providing
29 the bond to indemnify the state for such expenditures as required by this
30 chapter. The cost shall be fixed annually by the director, but shall not
31 exceed twenty-five dollars ($25.00) per examination hour.
32 (5) Each permittee shall acknowledge in writing each account received for
33 collection and shall maintain a record of such account, make a permanent
34 record of all sums collected by him and of all disbursements made by him.
35 Every permittee shall keep and preserve all records relating to accounts
36 received for collection, collections, receipts, and disposal or disbursement
37 of all creditors' funds for a period of five (5) years after the final dispo-
38 sition of any account. It shall be unlawful for any person to intentionally
39 make any false entry, omit to make a necessary entry, mutilate, secrete away,
40 destroy or otherwise dispose of any record mentioned in this subsection, pro-
41 vided a record may be disposed of after the five (5) year period heretofore
42 provided.
43 (6) Every permittee shall, within thirty (30) days after the close of
44 each calendar month, pay to his creditors the net proceeds of all collections
45 made by the permittee during said calendar month. Each permittee shall report
46 to the creditor all collections made by him and/or any payments made to the
47 creditor within thirty (30) days after the close of each calendar month.
48 (7) Every permittee shall maintain his books and records in accordance
49 with generally accepted accounting practices subject to such rules and regula-
50 tions as adopted by the director.
51 (8) The director, may impound the creditors' accounts, or trust accounts
52 of any permittee if it shall be deemed in the general public interest.
5
1 SECTION 6. That Section 26-2244, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 26-2244. CEASE AND DESIST ORDERS, PENALTY. (1) Whenever it appears to the
4 director that it is in the public interest, he may order any person to cease
5 and desist from acts, practices, or omissions which constitute a violation of
6 this chapter.
7 (2) Whenever, after notice and a hearing, the director finds that any
8 person has violated any provision of this chapter, the director may order the
9 person to cease and desist from acts, practices or omissions which constitute
10 a violation of this chapter and:
11 (a) Iimpose a civil penalty of not more than one two thousand five hun-
12 dred dollars ($1,02,500) for each violation upon any person found to have
13 violated any provision of this chapter;
14 (b) Issue an order restoring to any person in interest any consideration
15 that may have been acquired or transferred in violation of this chapter;
16 or
17 (c) Issue an order that the person violating this chapter pay costs,
18 which in the discretion of the director may include an amount representing
19 reasonable attorney's fees and reimbursement for investigative efforts.
20 SECTION 7. That Section 26-2245, Idaho Code, be, and the same is hereby
21 amended to read as follows:
22 26-2245. DIRECTOR'S POWER TO ENJOIN VIOLATIONS. (1) Whenever it appears
23 to the director that any person, or employee or agent thereof, has engaged in
24 or is about to engage in any act or practice or omission constituting a viola-
25 tion of any provision of this act chapter, or any rule or order hereunder, he
26 may in his discretion bring an action in any court of competent jurisdiction
27 to enjoin any such acts or practices and to enforce compliance with this act
28 chapter or any rules hereunder. Upon a showing that a person, or employee or
29 agent of any person, has engaged in or is about to engage in an act or prac-
30 tice constituting a violation of this act chapter or any rule or order hereun-
31 der, a permanent or temporary injunction, or restraining order shall be
32 granted and a receiver or conservator may be appointed for the defendant's
33 assets. The director shall not be required to furnish bond.
34 (2) In addition to the foregoing, the director, in his discretion and
35 upon a showing in any court of competent jurisdiction that a person has vio-
36 lated the provisions of this chapter or rule or order hereunder, may be
37 granted the following additional remedies:
38 (a) An order restoring to any person in interest any consideration that
39 may have been acquired or transferred in violation of this chapter;
40 (b) An order that the person violating this chapter, rule or order here-
41 under, pay a civil penalty to the department in an amount not to exceed
42 two thousand five hundred dollars ($2,500) for each violation;
43 (c) An order allowing the director to recover costs, which in the discre-
44 tion of the court may include an amount representing reasonable attorney's
45 fees and reimbursement for investigative efforts;
46 (d) An order granting other appropriate remedies upon a proper showing.
47 SECTION 8. That Section 26-2251, Idaho Code, be, and the same is hereby
48 amended to read as follows:
49 26-2251. CANCELLATION OF PERMIT. Any permittee or foreign permittee fail-
50 ing to apply in a timely manner for renewal of a permit shall have said permit
6
1 cancelled on canceled effective the day following the last day for renewal
2 applications to be filed. Engaging in collection agency business with a can-
3 celled canceled permit shall be a violation of the provisions of this chapter.
4 To restore a cancelled canceled permit the fee shall be two hundred dollars
5 ($200). A cancelled canceled permit may be restored only before the expiration
6 of six (6) months following the date of annual renewal.
STATEMENT OF PURPOSE
RS 11414C1
The primary purposes of this legislation are to (1) clarify the
definition of "credit counseling" in the Idaho Collection Agency
Act; (2) amend the application process to recognize that limited
liability companies may apply to become collection agencies; (3)
amend the Department's cease and desist, and injunctive authority
to allow orders for restitution and increase the fine amount, and
(4) amend the renewal provisions to allow renewal applications to
be postmarked by the last renewal date.
FISCAL IMPACT
No fiscal impact.
CONTACT
Name: Mary E. Hughes
Agency: Finance, Dept. of
Phone: 208-332-8060
Statement of Purpose/Fiscal Impact S 1288