Washington Governor Signs Debt Buyer Licensure Legislation
Earlier today, Governor Jay Inslee of Washington State signed into law House Bill 1822 that would require the licensure of debt buyers as “collection agencies.” Specifically, “any person or entity that is engaged in the business of purchasing delinquent or charged off claims for collection purposes, whether it collects the claims itself or hires a third party for collection or an attorney for litigation in order to collect such claims” must become licensed.
Washington State has required Third Party Collection Agencies be licensed for a number of years, but the definition of “collection agency” was not expansive enough to include debt buyers, a fact affirmed by the Washington Collection Agency Board on July 14, 2004 when they stated that “debt buyers that collect solely on their own claims and in their own names are not governed by the [Washington Collection Agency Act].”
The original draft of HB 1822 would have substantially impaired the legitimate business activity of debt buyers through a number of one-sided provisions that favored the consumer litigant, similar to the 2009 legislation passed in North Carolina. Through the assistance of DBA’s Washington State Legislative Co-Chairs, Brian Fair and Ray Henning, the services of a DBA retained lobbyist, and the help of other industry stakeholders, DBA International was successful in advocating for amendments focused on a more reasonable approach of licensure.
DBA International is pleased to report that as a result of these efforts and the support of the bill’s sponsor, we were able to achieve a positive outcome on behalf of our industry.
The debt buyer licensure requirement will affect all purchasers of delinquent or charged off claims that have Washington State residents in their portfolios. The bill will take effect on October 1, 2013. A copy of the bill can be found here.