Maine Ups the Ante on Debt Collection Licensing

The State of Maine recently enacted legislation that greatly expands those entities required to obtain a debt collection license. Previously, a debt collector needed to obtain a license if it was attempting to collect a debt incurred by a Maine resident to a Maine creditor. A debt collector also needed a license if it engaged in the "face-to-face" solicitation of creditor clients in Maine. These conditions have now been expanded.

An amendment to 32 MRSA § 11002(2)  expands what Maine law considers "conducting business in this state," and requires a debt collection license for anyone attempting to collect a debt incurred by a Maine resident to any creditor regardless of the creditor's location. Additionally, the "face-to-face" condition for solicitation of clients has been removed. Thus, a debt collector's solicitation of a creditor client in Maine, regardless of the manner of solicitation, will require a debt collector to obtain a debt collection license.

Though the amendments are seemingly small in stature, their impact will likely be widely felt. The practical effect of the amendments will be a dramatic increase in foreign entities now required to obtain a debt collection license in Maine. Consider that most debts are incurred to credit card companies or other entities located outside of Maine. Moreover, even a debt collector's telephonic solicitation of a client in Maine may require the entity be licensed in Maine even though it never steps foot in the state.