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Licensing Tips for Asset Buyers

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1. Review state laws to determine whether you fall within the definition of a debt collector. While the Fair Debt Collection Practices Act (FDCPA) is the standard-bearer for defining a debt collector, the FDCPA's definition of a debt collector may not apply to state licensing statutes. In fact, state law provides a variety of definitions for debt collectors regarding licensing, so asset buyers must examine each state's definition to consider whether obtaining licensure as a debt collector is appropriate.5. Keep in mind that definitions for state licensing laws and state debt collection practices laws do not always mirror each other. Just because an asset buyer does not qualify as a debt collector under a state's licensing requirements does not necessarily exempt that asset buyer from abiding by the state's general debt collection laws. Asset buyers must examine definitions under both subjects to determine how state licensing and collection practice laws and regulations apply.

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									          campus aca
                          By David Cherner




Licensing Tips for Asset Buyers
Five suggestions to help asset buyers understand and comply with state laws and regulations




C        redit and collection industry
         members are well aware of the
         diversity in state licensing laws
and regulations. Asset buyers in
particular have caught the attention of
                                               G U I D E S


                                               Understanding Asset Buying and Selling
                                                    CA’s Asset Buyers Division (ABD) has compiled its working knowledge on asset buying
state regulators and other licensing
authorities in part because they do not
always fit the mold of traditional third-
                                               A    and selling in three publications—Buying Receivables, Due Diligence Guidelines and
                                               A Guide for Understanding Purchase and Sale Agreements—which are available for
party debt collectors.
                                               purchase at http://www.acainternational.org/store. Learn how to successfully purchase
   Nevertheless, because licensing
definitions and exceptions can vary            accounts, perform due diligence and draft a purchase and sale agreement from these
significantly from state to state, asset       invaluable guides. For more information or to apply for ABD membership, e-mail
buyers must dedicate sufficient resources
                                               abd@acainternational.org or call +1(952) 926-6547.
to understand these laws and regulations
and act accordingly. Asset buyers may
want to:
1. Review state laws to determine               definition to consider whether                  business practices and structure may
   whether you fall within the definition       obtaining licensure as a debt collector         impact their ability to obtain
   of a debt collector. While the Fair          is appropriate.                                 licensure as a debt collector.
   Debt Collection Practices Act             2. Determine whether you are exempt             5. Keep in mind that definitions for
   (FDCPA) is the standard-bearer for           from licensure under state law.                 state licensing laws and state debt
   defining a debt collector, the               Certain states expressly provide that           collection practices laws do not
   FDCPA’s definition of a debt                 asset buyers are not considered debt            always mirror each other. Just
   collector may not apply to state             collectors under 
								
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