New Mexico Administrative Code › Title 12 - TRADE, COMMERCE AND BANKING › Chapter 24 - COLLECTION AGENCIES › Part 2 - COLLECTION AGENCY REGULATORY ACT › Section 12.24.2.8 - LICENSING REQUIREMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
A. In
				determining the amount of bond to be furnished by an applicant for renewal of a
				collection agency license, the penal sum of the bond shall be the greater of
				$5,000.00 or an amount equal to the proceeds due clients for at least two
				months average collections during the previous licensing year; provided,
				however, no licensee shall be required to furnish a bond in excess of
				$25,000.00 unless the financial condition of the applicant is such as to cause
				the director concern about sufficient protection for clients, in which case the
				director may require a bond in minimum amount of at least six months proceeds
				due clients during the previous licensing year. If the financial statement of
				the applicant reflects a condition where current liabilities are equal to or
				are in excess of current assets, the director may deny application for an
				original or renewal license pending applicant's taking steps to improve its
				financial condition.
B. The
				director shall not approve licenses to applicants using trade styles that
				indicate or infer a condition that is not true; viz., "credit bureau" when
				there is no bona fide credit reporting service; "national association", etc.
				where there is no such connection; "detective agency", etc., where there is no
				such actual activity or any name that may imply a municipal, county, state or
				federal affiliation.
C. Any
				employee or owner of a collection agency who uses any alias must register same
				with the director.
D. The director
				shall not approve licenses to applicants using trade names or styles in a
				particular area where those trade names or styles are so similar to that of
				another licensee or other business in the same area as to cause confusion as to
				identity.
E. No licensee shall use
				any form notice to debtors without first obtaining approval of said form by the
				director or his designee. Individual notices or communications to debtors need
				not be approved by the director, but content thereof shall comply with the
				spirit and intent of the act and these rules and regulations. Specifically, but
				not all inclusively, licensees shall not threaten, coerce, infer consequences
				or effects in which there is no truth in substance, simulate legal process, use
				innuendoes or misleading phraseology, or engage in unethical or unfair
				practices (including, but not limited to, those practices which are prohibited
				by the federal Fair Debt Collection Practices Act). Legal action or process may
				not be threatened unless the collection agency, or the creditor, intends to
				take such action and the agency can establish that such action is normally
				taken.
F. No licensee shall
				conspire with any law enforcement official relative to deferring payment of
				costs or paying costs on a "contingent basis" nor shall any law enforcement
				official be paid any fee, salary or any remuneration by a collection agency
				other than prescribed by law and paid through the offices of a court of
				competent jurisdiction.
G. Every
				licensee shall deal openly, fairly and honestly in the conduct of the
				collection agency business with both client and debtor and shall at all times
				conform to the canons of business ethics and practices of the American
				collectors association, to the applicable rules and regulations of the federal
				trade commission and to the provisions of the Fair Debt Collection Practices
				Act.
H. Clients' shares of
				collections shall be deposited into a trust account within two banking days,
				except that if such monies are less than $100,000.00, deposits may be made
				weekly.
I. Whenever a person
				actively in charge of an office ceases to be in charge and the licensee has
				notified the director in writing within ten days from such cessation as
				required by Section 23 of the Act, the licensee shall have forty days from such
				cessation in which to have a proper application for a manager's license filed
				and the agency license shall remain in force until the director examines and
				acts on said manager's application. If the application for manager's license is
				not approved by the director, the licensee shall have an additional thirty days
				in which to file an additional application for a manager's license or show
				cause for an extension of time to submit the required application. Failure to
				adhere to this procedure will render the agency license void ipso facto. The
				notice to be given pursuant to Section 23 of the Act, shall specify the exact
				date when the person previously in active charge of the office ceased to be in
				charge.
J. Every collection agency
				licensee shall maintain a complete record of all checks outstanding against its
				trust account(s) which have not been presented for payment as of the date of
				most recent trust account bank statement(s). Such record shall be made
				available to the director or his representatives upon demand.
K. Every collection agency licensee shall
				maintain and have available at all times, for examination by the director or
				his representatives, a record showing at least the following information on all
				collections made on each day:
(1) the amount
				of each collection paid to the licensee;
(2) the amount of each collection paid
				directly to the client;
(3) the
				amount of the client's share of the collection;
(4) the amount of the licensee's share of the
				collection;
(5) any other costs or
				charges retained by the licensee;
(6) the amount deposited to the trust
				accounts;
(7) the name or code
				number of the client for which the collection was made;
(8) the amount remitted to the client on all
				collections.
(a) Numbered receipts filed
				consecutively shall be used for cash payments; however, totals for paragraphs
				1, 2, 3, 4, 5, 6 and 8 [now Paragraphs (1), (2), (3), (4), (5), (6) and (8) of
				Subsection K of 12.24.2.8 NMAC] must be provided for each monthly accounting
				period.
(b) Said records may
				contain any additional information which the licensee may desire to include as
				an aid to its record keeping and operations.