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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 - 2002IN 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)andor (7) of section 26-2223, Idaho Code.,11which is exempt from federal income taxes as provided inNo 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 theiInternalrRevenuecCode. 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 thisactchapter 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 engagefor compensationin the business ofcredit35 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, thena list of themembers of saidpartnershipand 3 their addresses;must be filed with the applicationor if the applicant is a 4 limited liability company a list of its members or managers and their 5 addresses. Everypartnership in its application for a permitcorporation shall 6 designate and appoint one (1) or more of itsmembersofficers or employees, 7andeverycorporation in its application for a permitpartnership shall desig- 8 nate and appoint one (1) or more of itsofficers or employeespartners, 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, partnershipor corpo-12rationor limited liability company unless and until the personsand officers13 so designatedby the partnership or corporationshall submit to and pass the 14 examination required by thisactchapter. 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 bythe president or secre-39tary wherean individual associated with the applicantis an association or40corporationas 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 applicationmade prior topostmarked on 44 or before the fifteenth day of March of each year, the holder of any permit 45 issued under the provisions of thisactchapter 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 thisactchapter, 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 thanonetwo 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 thisactchapter, 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 thisact31 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 thisactchapter 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 4cancelled oncanceled effective the day following the last day for renewal 5 applications to be filed. Engaging in collection agency business with acan-6celledcanceled permit shall be a violation of the provisions of this chapter. 7 To restore acancelledcanceled permit the fee shall be two hundred dollars 8 ($200). Acancelledcanceled 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 - 2002Moved 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) Theactualcost 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 - 2002IN 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)andor (7) of section 26-2223, Idaho Code.,12which is exempt from federal income taxes as provided inNo 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 theiInternalrRevenuecCode. 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 thisactchapter 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 engagefor compensationin the business ofcredit36 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, thena list of themembers of saidpartnershipand 4 their addresses;must be filed with the applicationor if the applicant is a 5 limited liability company a list of its members or managers and their 6 addresses. Everypartnership in its application for a permitcorporation shall 7 designate and appoint one (1) or more of itsmembersofficers or employees, 8andeverycorporation in its application for a permitpartnership shall desig- 9 nate and appoint one (1) or more of itsofficers or employeespartners, 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, partnershipor corpo-13rationor limited liability company unless and until the personsand officers14 so designatedby the partnership or corporationshall submit to and pass the 15 examination required by thisactchapter. 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 bythe president or secre-40tary wherean individual associated with the applicantis an association or41corporationas 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 applicationmade prior topostmarked on 45 or before the fifteenth day of March of each year, the holder of any permit 46 issued under the provisions of thisactchapter 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 thisactchapter, 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) Theactualcost 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 thanonetwo 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 thisactchapter, 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 thisact28 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 thisactchapter 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 1cancelled oncanceled effective the day following the last day for renewal 2 applications to be filed. Engaging in collection agency business with acan-3celledcanceled permit shall be a violation of the provisions of this chapter. 4 To restore acancelledcanceled permit the fee shall be two hundred dollars 5 ($200). Acancelledcanceled 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