Scope Of The Requirement That A Licensed Collection Agency Maintain An Office In The Commonwealth - Q4 1999

A licensed affiliate of a sales finance company provides many servicing and operational functions for the sales finance company, including billing and collecting monthly payments, and, when payments are past due, preparing and mailing collection letters and making other efforts, consistent with 209 CMR 18.00 and 940 CMR 7.00, to collect the payments. However, the billing and collection activities are a small fraction of the business function.

The Division's regulation at 209 CMR 18.05 provides, in part, that a collection agency "engaged mainly or preponderantly in the collection of debt of consumer debtors shall maintain an office in the Commonwealth."

It is the position of the Division that a consumer loan servicer and applicant for a collection agency license, who intends to collects payments that are more than 30 days past due as an incidental part of its business, need not maintain an office within the Commonwealth. However, as a licensed collection agency, records must be made available to the Division for examination within the Commonwealth in a timely fashion and at a mutually satisfactory site.