REPORT TITLE:
Collection Agencies 

DESCRIPTION:
Permits an out-of-state collection agency to operate in the State
without complying with all of the licensing requirements, subject
to certain conditions and limitations.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2017
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                S.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO COLLECTION AGENCIES.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 443B, Hawaii Revised Statutes, is
 
 2 amended by adding a new section to be appropriately designated
 
 3 and to read as follows:
 
 4      "§443B-      Exempt out-of-state collection agency.  (a)  An
 
 5 out-of-state collection agency may be designated as an exempt
 
 6 out-of-state collection agency; provided the applicant shall
 
 7 submit the following:
 
 8      (1)  An application for out-of-state collection agency
 
 9           exemption;
 
10      (2)  Verification that the out-of-state collection agency
 
11           holds a current license, permit, or registration to
 
12           conduct business as a collection agency, which is in
 
13           good standing in compliance with the laws of the home
 
14           state, including the maintenance of a bond in the
 
15           amount as required by the home state, and that such
 
16           state of licensure does not require Hawaii collection
 
17           agencies to obtain a license to collect debts in their
 
18           state;
 
19      (3)  An agreement in writing to comply with the requirements
 
20           of sections 443B-15, 443B-16, 443B-17, 443B-18, and
 

 
Page 2                                                     2017
                                     H.B. NO.           H.D. 1
                                                        S.D. 1
                                                        

 
 1           443B-19; and
 
 2      (4)  Payment of the following nonrefundable fees:
 
 3           (A)  With the application, an application fee of $25;
 
 4                and
 
 5           (B)  Upon approval to grant an out-of-state collection
 
 6                agency exemption, the compliance resolution fund
 
 7                fee for collection agencies.
 
 8      (b)  An exempt out-of-state collection agency may renew the
 
 9 exemption biennially by June 30 of each even-numbered year;
 
10 provided the applicant satisfies subsection (a).
 
11      (c)  An out-of-state collection agency shall not collect or
 
12 attempt to collect any money or any other forms of indebtedness
 
13 alleged to be due and owing from any person who resides or does
 
14 business in this State without first registering under this
 
15 chapter or receiving an exemption, pursuant to this section."
 
16      SECTION 2.  Section 443B-1, Hawaii Revised Statutes, is
 
17 amended by amending the definition of "collection agency" to read
 
18 as follows:
 
19      ""Collection agency" means any person, whether located
 
20 within or outside this State, who by oneself or through others
 
21 offers to undertake or holds oneself out as being able to
 
22 undertake or does undertake to collect for another person, claims
 
23 or money due on accounts or other forms of indebtedness for a
 

 
Page 3                                                     2017
                                     H.B. NO.           H.D. 1
                                                        S.D. 1
                                                        

 
 1 commission, fixed fee, or a portion of the sums so collected.
 
 2      "Collection agency" includes:
 
 3      (1)  Any person using any name other than the person's own
 
 4           in collecting the person's own claims with the
 
 5           intention of conveying, or which tends to convey the
 
 6           impression that a third party has been employed;
 
 7      (2)  Any person who, in the conduct of the person's business
 
 8           for a fee, regularly repossesses any merchandise or
 
 9           chattels for another; [and]
 
10      (3)  Any person who regularly accepts the assignment of
 
11           claims or money due on accounts or other forms of
 
12           indebtedness and brings suits upon the assigned claims
 
13           or money due on accounts or other forms of indebtedness
 
14           in the person's own name; provided that any suits shall
 
15           be initiated and prosecuted by an attorney who shall
 
16           have been appointed by the assignee[.]; and
 
17      (4)  Any person who files for and is granted an out-of-state
 
18           collection agency exemption, pursuant to 
 
19           section 443B-  ; provided that:
 
20           (A)  The out-of-state collection agency is licensed or
 
21                registered as a collection agency in a state that
 
22                regulates and licenses collection agencies and
 
23                does not require Hawaii collection agencies to
 

 
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                                     H.B. NO.           H.D. 1
                                                        S.D. 1
                                                        

 
 1                obtain a license to collect debts in their state
 
 2                if such agencies' collection activities are
 
 3                limited to the activities described in
 
 4                subparagraphs (B), (C), and (D);
 
 5           (B)  The out-of-state collection agency is collecting
 
 6                debts on behalf of an out-of-state creditor;
 
 7           (C)  The out-of-state collection agency does not
 
 8                solicit or engage in collection activities for any
 
 9                clients in this State;
 
10           (D)  The out-of-state collection agency only collects
 
11                debts using interstate communication methods,
 
12                including telephone, facsimile, or mail; and
 
13           (E)  The out-of-state collection agency maintains a
 
14                regular active business office in the State and
 
15                designates a principal collector as required under
 
16                section 443B-6.
 
17      "Collection agency" does not include licensed attorneys at
 
18 law acting within the scope of their profession, licensed real
 
19 estate brokers, and salespersons residing in this State when
 
20 engaged in the regular practice of their profession, nor banks,
 
21 trust companies, building and loan associations, savings and loan
 
22 associations, financial services loan companies, credit unions,
 
23 companies doing an escrow business, individuals regularly
 

 
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                                     H.B. NO.           H.D. 1
                                                        S.D. 1
                                                        

 
 1 employed on a regular wage or salary in the capacity of credit
 
 2 persons or in other similar capacity for a single employer who is
 
 3 not a collection agency, nor any public officer or any person
 
 4 acting under an order of court."
 
 5      SECTION 3.  Statutory material to be repealed is bracketed.
 
 6 New statutory material is underscored.
 
 7      SECTION 4.  This Act shall take effect on July 1, 2050.