License Applications Must Be Submitted No Later Than January 1, 2022

The Minnesota Department of Commerce spearheaded a multi-year legislative effort to update Minnesota’s Collection Agency Act which resulted in the enactment of Chapter # 4 of the First Special Session of 2021 (relevant text appears on pages 54-64). Included in this update, is an expanded definition of “collection agency” to include debt buyers. The law defines debt buyer as a “business engaged in the purchase of any charged-off account, bill, or other indebtedness for collection purposes, whether the business collects the account, bill, or other indebtedness, hires a third party for collection, or hires an attorney for litigation related to the collection.” The practical effect of this change is to require debt buyers to be licensed as collection agencies as of January 1, 2022.

RMAI worked closely with the Department of Commerce to amend the proposed bill text to:

  • Statutorily exempt debt buyers from six provisions in the Collection Agency Act related to a third-party collection agency’s interaction with clients, including the maintaining of trust accounts;
  • Add a hold harmless provision that any debt buyer whose application is filed no later than January 1, 2022 may continue to operate without a license until the commissioner approves or denies the application; and
  • Allow affiliated companies to operate under a single license and be subject to a single examination, provided that all the affiliated company names are listed on the license.

RMAI would encourage debt buying companies to share this information with their staff responsible for legal and compliance. Additionally, it would be prudent to submit your application early should there be any unforeseen problems.


The Minnesota Department of Commerce recently issued a FAQ explaining the requirements and procedures for debt buyers. Additional information related to applications and other resources can be found on the Minnesota Department of Commerce webpage at

This Member Alert is intended for members of the Receivables Management Association International, is for informational purposes only, and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.