Licensing Changes in Tennessee and Louisiana
Tennessee: Good news for passive debt buyers!
On May 22, 2014, the Tennessee Governor signed into law SB 2133 which exempts certain entities from the Tennessee Collection Service Act licensing provisions and which amends TCA Title 62, Chapter 20.
Specifically the amendment exempts “Any person that holds or acquires accounts, bills or other forms of indebtedness through purchase, assignment, or otherwise; and only engages in collection activity through the use of a licensed collection agency or an attorney authorized to practice law in this state”.
DBA supported this legislation as there had been a series of suits and conflicting decisions in Tennessee.
Louisiana: Louisiana creditors need a license from the Office of Financial Institutions.
On May 28, 2014, the Louisiana Governor was sent HB 766 for signature. HB 766 states that a consumer credit transaction be null, void, unenforceable and uncollectible as being contrary to the policy of this state if the creditor has not obtained a license from the Office of Financial Institutions, if required to do so, at the time the transaction is made.
Members should consult their counsel in purchasing Louisiana debt to request a representation and warrantee contract clause that the creditor is properly licensed in Louisiana for consumer credit transactions
We have included sample contract language for illustrative purposes: “Seller has the power and authority and all licenses and permits (“Authorizations”), if any, required by governmental authority to carry on its business as now being conducted which relates to the Purchased Accounts, which Authorizations are in full force and effect.
June 3, 2014