New Licensing Requirements for Massachusetts Collection Law Firms
The Massachusetts Division of Banks (DOB) declared that Massachusetts collection law firms are required to be licensed as debt collectors under Mass. Gen. Laws Ch. 92, § 24 et. seq.
The November 2, 2015 letter from the Massachusetts DOB addressed whether a law firm, self-described as “overwhelmingly concentrated in the area of consumer debt collection on behalf of its clients,” was required to be licensed. At issue was the applicability of the licensing exclusion for “attorneys-at-law collecting a debt on behalf of a client.”
The DOB clarified that the determination “turns on the extent of the debt collection activity conducted by the firm.” It concluded that licensure is required where the law firm’s “principal purpose is the collection of debts and therefore its activities are beyond the scope of the attorney-at-law exemption.”
In a footnote, the DOB gives Massachusetts collection law firms six months from the date of the letter to comply, noting “the debt collector licensing requirement for law firms composed of Massachusetts licensed attorneys, as set forth in this Opinion, is a new requirement that will not be imposed retroactively on affected law firms. Furthermore, the Division recognizes that immediate compliance by affected law firms is not feasible.”