By the Division of Banks

Collection Agency Licensing Requirements For Out-Of-State Banks

Any person or entity which collects debts on behalf of a third party must obtain a license from the Commissioner of Banks unless otherwise exempt under Mass. Gen. Laws chapter 93, § 24. Section 24 contains an exemption from licensing for a bank as defined in Mass. Gen. Laws chapter 167, § 1, as well as a national banking association having its main office in the Commonwealth. It is the position of the Division of Banks that because Mass. Gen. Laws chapter 167, § 1 defines a bank as "a state-chartered bank in the Commonwealth," an out-of-state bank would be required to obtain a collection agency license in order to service and collect mortgage loans in Massachusetts that are more than 30 days past due. However, the Division has filed legislation which would extend the current exemption to banks chartered by other states. This legislation received a favorable report from the Banking Committee for the 1997-1998 session.