NAC: CHAPTER 649 - COLLECTION AGENCIES

[Rev. 8/27/2018 12:28:29 PM]

[NAC-649 Revised Date: 8-18]

CHAPTER 649 - COLLECTION AGENCIES

GENERAL PROVISIONS

649.010 Definitions.

649.013 “Collection agency” defined.

649.017 “Foreign collection agency” defined.

649.020 “Machine-derived form letters” defined.

649.030 “Primary collection agency” defined.

649.040 “Secondary collection agency” defined.

ADMINISTRATION

649.060 Fee for supervision and related activities: Amount; collection; failure to pay.

649.070 Assessment for costs related to audits and examinations.

649.076 Examination, investigation and audit of foreign collection agencies.

649.081 Preparation and submission of trust account statements and reports of financial standing.

649.086 Public inspection of written instruments filed with Division of Financial Institutions.

LICENSING AND CERTIFICATION

649.105 Exemption from requirement to obtain license.

649.111 Licensing of certain community managers required.

649.120 Collection agencies: Fees.

649.130 Branch offices: Filing and contents of application for permit to operate.

649.135 Branch offices: Arrangements required for maintenance of records and trust account.

649.140 Branch offices: Appointment of Commissioner of Financial Institutions as agent for service of process.

649.151 Managers: Fees.

649.160 Foreign collection agencies: Fees; reinstatement of expired or revoked certificate; transferability of certificate.

MANAGERS

649.210 Responsibilities.

649.220 Restrictions on service for multiple agencies.

649.230 Notification of change of employment.

CONDUCT OF BUSINESS

649.250 Prerequisites to conducting business.

649.260 Use of fictitious names.

649.270 Depositories used for maintenance of certain separate accounts.

649.280 Approval of machine-derived form letters.

DISCIPLINARY ACTION

649.310 Failure to file verified answer to complaint; confidentiality of complaint and certain related information.

649.320 Revocation or suspension of license: Violation of certain provisions of federal law.

649.330 Revocation or suspension of license or certificate: Violation of certain regulations or statutes; procedures.

649.340 Fine for failure to submit required report.

GENERAL PROVISIONS

NAC 649.010 Definitions. (NRS 649.053) As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 649.013 to 649.040, inclusive, have the meanings ascribed to them in those sections.

(Supplied in codification; A by Comm’r of Financial Institutions by R111-06, 6-28-2006)

NAC 649.013 “Collection agency” defined. (NRS 649.053) “Collection agency” means a person or entity which is licensed pursuant to NRS 649.075 to 649.167, inclusive.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.017 “Foreign collection agency” defined. (NRS 649.053) “Foreign collection agency” means a person or entity which holds a certificate of registration pursuant to NRS 649.171.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.020 “Machine-derived form letters” defined. (NRS 649.053) “Machine-derived form letters” means letters which are automatically prepared by a machine and which are designed to be mailed without the addition of any further words to them, except for the addition of the appropriate names and addresses.

[Banking Div., Collection Agency Reg. No. 110 part A, eff. 5-3-74]

NAC 649.030 “Primary collection agency” defined. (NRS 649.053) “Primary collection agency” means any collection agency which is not a secondary collection agency.

[Banking Div., Collection Agency Reg. No. 110 part B, eff. 5-3-74]

NAC 649.040 “Secondary collection agency” defined. (NRS 649.053) “Secondary collection agency” means a collection agency which engages directly or indirectly in the solicitation or encouragement of debtors to pay delinquent debts directly to the debtors’ creditors through the use of machine-derived form letters.

[Banking Div., Collection Agency Reg. No. 110 part C, eff. 5-3-74]

ADMINISTRATION

NAC 649.060 Fee for supervision and related activities: Amount; collection; failure to pay. (NRS 649.053, 649.295, 658.101)

1. The Commissioner of Financial Institutions will charge and collect a fee of $75 per hour from each collection agency for any supervision, examination, audit, investigation or hearing conducted pursuant to chapter 649 of NRS.

2. The Commissioner will bill each collection agency upon the completion of the activity for the fee established in subsection 1. The fee must be paid within 30 days after the date on which the bill is received. In addition to any other fee allowed by this chapter or chapter 649 of NRS, and except as otherwise provided in this subsection, any payment received after that date must include a penalty of 10 percent of the fee plus an additional 1 percent of the fee for each month, or portion of a month, that the fee is not paid. The Commissioner may waive the penalty for good cause.

3. Failure of a collection agency to pay the fee required in subsection 1 as provided in this section constitutes grounds for revocation of its license.

(Added to NAC by Comm’r of Financial Institutions, eff. 4-20-88; A 11-27-89, eff. 7-1-89; R111-06, 6-28-2006; R054-16, 9-9-2016)

NAC 649.070 Assessment for costs related to audits and examinations. (NRS 649.053, 649.300)

1. Except as otherwise provided in NAC 658.030, each primary and secondary collection agency shall pay to the Division of Financial Institutions of the Department of Business and Industry an annual assessment of $300 to cover the costs related to the employment of a certified public accountant and the performance of audits and examinations conducted by the Division.

2. The Division shall bill each collection agency for the assessment. The assessment must be paid within 30 days after the date on which the bill is received.

3. In addition to any other fee allowed by this chapter or chapter 649 of NRS, a charge of 10 percent of the assessment will be imposed on any collection agency whose assessment is received by the Division after the date on which the assessment is due.

(Added to NAC by Comm’r of Financial Institutions, eff. 12-17-87; A 5-27-92; R111-06, 6-28-2006)

NAC 649.076 Examination, investigation and audit of foreign collection agencies. (NRS 649.053, 649.171)

1. A foreign collection agency shall allow the examination, investigation or audit of any accounts, books and records by the Commissioner of Financial Institutions at any time. The Commissioner may revoke the certificate of a foreign collection agency that does not allow him or her to conduct an examination, investigation or audit of any accounts, books and records.

2. In addition to all fees required by this chapter and chapter 649 of NRS, a foreign collection agency shall pay for the actual costs for travel in connection with any examination, investigation or audit conducted by the Commissioner.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.081 Preparation and submission of trust account statements and reports of financial standing. (NRS 649.053, 649.056, 649.171, 649.345) Each collection agency and foreign collection agency shall provide to the Commissioner of Financial Institutions, annually and before renewal of its license or certificate, as applicable, a copy of all trust account statements and a report of its financial standing which must be prepared by a licensed certified public accountant who is in good standing in the state where the report is prepared.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.086 Public inspection of written instruments filed with Division of Financial Institutions. (NRS 649.053, 649.065) Except as otherwise provided in NAC 649.310 or by specific statute, all papers, documents, reports and other written instruments filed with the Division of Financial Institutions of the Department of Business and Industry pursuant to this chapter and chapter 649 of NRS are open to public inspection unless the Commissioner of Financial Institutions determines that the information is required to be withheld to protect the public welfare or the welfare of a collection agency, foreign collection agency or manager, as applicable.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

LICENSING AND CERTIFICATION

NAC 649.105 Exemption from requirement to obtain license. (NRS 649.053, 649.075) A person who is not required to obtain a license as set forth in NRS 649.075 must obtain an exemption from the Commissioner of Financial Institutions certifying that he or she is not required to obtain a license. The exemption must be obtained before the person engages in collection activities governed by chapter 649 of NRS.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.111 Licensing of certain community managers required. (NRS 649.020, 649.053, 649.075)

1. In accordance with the definition of “collection agency” set forth in NRS 649.020, a community manager must be licensed as a collection agency pursuant to this chapter and chapter 649 of NRS if the community manager, or any employee, agent or affiliate of the community manager, performs or offers to perform any act associated with a foreclosure of a lien pursuant to NRS 116.31162 to 116.31168, inclusive.

2. As used in this section, “community manager” has the meaning ascribed to it in NRS 116.023.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.120 Collection agencies: Fees. (NRS 649.053, 649.295)

1. An application for licensure as a collection agency must be accompanied by a nonrefundable application fee of $375.

2. The applicant must pay an additional application fee of $300 for each original license issued, of which not more than $150 may be refunded by the Commissioner of Financial Institutions on a prorated basis if:

(a) The applicant withdraws his or her application before the Commissioner takes action on the application;

(b) The Commissioner deems the application withdrawn pursuant to NRS 649.196 because the applicant did not submit all required information and fees within the time specified; or

3. A collection agency shall pay the following fees:

(a) To renew a license, $375;

(b) For a duplicate license or a license for a transfer of location, $15;

(d) To renew a permit to operate a branch office of a licensed collection agency, $150.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.130 Branch offices: Filing and contents of application for permit to operate. (NRS 649.053, 649.167) An application for a permit to operate a branch office must be filed with the Commissioner of Financial Institutions on a form provided by the Commissioner. The application must contain:

1. The information required by subsection 2 of NRS 649.095 for an application for a license;

2. The number of the account maintained pursuant to subsection 2 of NRS 649.355, and the name and address of the bank where the account is maintained; and

3. Proof that the manager named in the application holds a current manager’s certificate issued by the Commissioner of Financial Institutions.

(Added to NAC by Comm’r of Financial Institutions, eff. 6-20-90) — (Substituted in revision for NAC 649.080)

NAC 649.135 Branch offices: Arrangements required for maintenance of records and trust account. (NRS 649.053, 649.054, 649.056, 649.167) The Commissioner of Financial Institutions will not issue a permit to operate a branch office in a state other than Nevada until the Commissioner is satisfied that the applicant has made appropriate arrangements for:

1. The storage, maintenance and retention in this State of all records regarding the collection of claims for or from residents of this State; and

2. The maintenance of an account pursuant to NRS 649.355 for the deposit of all money collected for or from residents of this State.

(Added to NAC by Comm’r of Financial Institutions, eff. 6-20-90) — (Substituted in revision for NAC 649.085)

NAC 649.140 Branch offices: Appointment of Commissioner of Financial Institutions as agent for service of process. (NRS 649.053, 649.167)

1. The Commissioner of Financial Institutions will not issue a permit to operate a branch office for which the manager is not a resident of this State until the manager has appointed in writing the Commissioner to be his or her agent, in any action or proceeding against him or her concerning chapter 649 of NRS, upon whom all process may be served. In this writing, the manager must agree that any process against the manager which is served on the Commissioner is of the same legal validity as if it had been served on him or her and state that the appointment continues in force as long as any liability remains outstanding against him or her in this State. The appointment must contain a stipulation agreeing to venue for any proceeding concerning chapter 649 of NRS in any judicial or administrative district in this State without regard to the location of the residence of the manager or the principal place of business of the collection agency. The appointment must be acknowledged before an officer authorized to take acknowledgments of deeds and must be filed in the office of the Commissioner. A copy of the appointment which is certified by the Commissioner is sufficient evidence of the appointment and agreement.

2. When any process is served upon the Commissioner pursuant to this section, the Commissioner shall mail the process by certified mail to the last known address of the manager. Service is complete upon the mailing. The manner of serving process described in this subsection does not affect the validity of any other service authorized by law.

(Added to NAC by Comm’r of Financial Institutions, eff. 6-20-90) — (Substituted in revision for NAC 649.090)

NAC 649.151 Managers: Fees. (NRS 649.053, 649.205, 649.295)

1. An application for a manager’s certificate must be accompanied by:

(a) A nonrefundable fee of $190; and

(b) A nonrefundable investigation fee of $115.

2. An applicant must pay an additional application fee of $30 for issuance of the certificate.

3. The annual renewal fee for a manager’s certificate is $30.

4. For each manager’s certificate that is reinstated, the holder of the certificate shall pay a fee of $45.

5. An applicant who does not pass the examination and wishes to reapply must pay a reexamination fee of $100 for each subsequent examination.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.160 Foreign collection agencies: Fees; reinstatement of expired or revoked certificate; transferability of certificate. (NRS 649.053, 649.171)

1. An application for a certificate of registration as a foreign collection agency must be accompanied by an application fee of $500. The Commissioner of Financial Institutions may refund not more than $300 of the fee on a prorated basis if:

(a) The applicant withdraws his or her application before the Commissioner takes action on the application;

(b) The Commissioner withdraws the application because the applicant did not submit all information and fees within the time specified; or

2. The holder of a certificate of registration as a foreign collection agency must pay a fee of $200 to renew the certificate of registration.

3. A certificate of registration as a foreign collection agency must not be reinstated after it expires or has been revoked by the Commissioner.

4. A certificate of registration as a foreign collection agency is not transferable.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

MANAGERS

NAC 649.210 Responsibilities. (NRS 649.053, 649.056, 649.305)

1. The person who holds a valid manager’s certificate and who is the designated manager of a collection agency must have direct supervisory responsibility for employees who engage in collections in this State and must participate in the actual management, operation and administration of the licensed agency.

2. The manager must be available in person at the business address of the agency in order to perform his or her required functions and duties.

[Banking Div., Collection Agency Reg. No. 1, eff. 1-14-71] — (NAC A by Comm’r of Financial Institutions by R111-06, 6-28-2006) — (Substituted in revision for NAC 649.100)

NAC 649.220 Restrictions on service for multiple agencies. (NRS 649.053, 649.056)

1. No person may serve as manager of more than one primary collection agency at the same time.

2. No person may serve as manager of more than one secondary collection agency at the same time.

3. At the discretion of the Commissioner of Financial Institutions, upon application and his or her written approval first obtained, a manager of a collection agency may serve as manager of one primary collection agency and one secondary collection agency at the same time.

4. The approval may be revoked by the Commissioner at any time if he or she finds that:

(a) Confusion may exist in the mind of the public in dealing with the collection agencies having common management.

(b) The various business functions of the collection agencies operating under common management are likely to be or are being merged or commingled, or are otherwise being conducted, in the Commissioner’s opinion, in a manner which may be deleterious or damaging to the best interests of the public or the collection agency industry.

(c) Improper or abusive collection methods are being used by either or both of the collection agencies operating under common management.

(d) Either or both of the collection agencies operating under common management are not conducting their affairs in compliance with chapter 649 of NRS or any of the regulations of the Commissioner adopted under that chapter.

(e) Insufficient time is being devoted by the manager to the affairs of one or the other collection agencies operating under common management.

[Banking Div., Collection Agency Reg. No. 120, eff. 5-3-74] — (NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R111-06, 6-28-2006) — (Substituted in revision for NAC 649.110)

NAC 649.230 Notification of change of employment. (NRS 649.053, 649.056) Each manager holding a manager’s certificate issued pursuant to chapter 649 of NRS shall notify the Commissioner of Financial Institutions in writing of any change of employment within 10 days after the change.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

CONDUCT OF BUSINESS

NAC 649.250 Prerequisites to conducting business. (NRS 649.053, 649.056) A person shall not conduct business as a collection agency in this State unless:

1. The person possesses each license or permit required by this chapter, chapter 649 of NRS or a local governmental entity; and

2. The location of the collection agency complies with all applicable planning and zoning ordinances.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.260 Use of fictitious names. (NRS 649.053, 649.056, 649.365)

1. A collection agency, or its manager, agents or employees, shall not use a fictitious name in the collection of a debt unless that name has been filed with the Commissioner of Financial Institutions on a form provided by the Commissioner.

2. A manager, agent or employee who has filed for the use of a fictitious name shall not use that fictitious name in association with another collection agency unless the Commissioner of Financial Institutions has been notified in writing of the change in association.

3. The Commissioner of Financial Institutions shall, within 5 days after receiving a form or notice pursuant to this section, acknowledge its receipt.

(Added to NAC by Comm’r of Financial Institutions, eff. 6-20-90) — (Substituted in revision for NAC 649.075)

NAC 649.270 Depositories used for maintenance of certain separate accounts. (NRS 649.053, 649.056, 649.355) Each bank or credit union in which a collection agency maintains a separate account for purposes of NRS 649.355 must be insured by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund or a private insurer approved pursuant to NRS 678.755.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.280 Approval of machine-derived form letters. (NRS 649.053, 649.056, 649.059)

1. All machine-derived form letters must be submitted to the Commissioner of Financial Institutions for review and approval before their actual use by the collection agency.

2. No collection agency may use any machine-derived form letter unless it has received prior written approval from the Commissioner.

[Banking Div., Collection Agency Reg. No. 130, eff. 5-3-74] — (NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R111-06, 6-28-2006) — (Substituted in revision for NAC 649.050)

DISCIPLINARY ACTION

NAC 649.310 Failure to file verified answer to complaint; confidentiality of complaint and certain related information. (NRS 649.053, 649.067, 649.385)

1. If a collection agency, foreign collection agency or person with a manager’s certificate, or an authorized representative of that collection agency, foreign collection agency or manager, fails to file a verified answer to a complaint within the time prescribed by the Commissioner of Financial Institutions pursuant to NRS 649.385, the collection agency, foreign collection agency or manager is deemed to have admitted to the allegations contained in the complaint.

2. Subject to the discretion of the Commissioner and except as otherwise provided in NRS 649.067 or other specific statute, a complaint filed with the Division of Financial Institutions of the Department of Business and Industry, any documents filed with the complaint, and any report or information resulting from an investigation of a complaint are confidential.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.320 Revocation or suspension of license: Violation of certain provisions of federal law. (NRS 649.053, 649.395) The Commissioner of Financial Institutions will consider a violation by any collection agency or collection agent of any of the provisions of 15 U.S.C. §§ 1692b to 1692j, inclusive, as those sections existed on July 1, 1986, to be an act or omission inconsistent with the faithful discharge of the duties or obligations of a collection agency or collection agent and grounds for the suspension or revocation of the license of the collection agency or collection agent.

[Banking Div., Harassment in Debt Collection Reg., eff. 1-17-79] — (NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions, 5-19-88) — (Substituted in revision for NAC 649.150)

NAC 649.330 Revocation or suspension of license or certificate: Violation of certain regulations or statutes; procedures. (NRS 649.053, 649.171, 649.215, 649.395) The Commissioner of Financial Institutions may revoke or suspend the license of a collection agency, the certificate of registration of a foreign collection agency or a manager’s certificate if the collection agency, foreign collection agency or manager violates any provision of this chapter or NRS 649.305 to 649.375, inclusive, including, without limitation, a provision that imposes a fee or assessment. A revocation or suspension of a license or certificate must be made in accordance with the procedures set forth in chapter 649 of NRS.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)

NAC 649.340 Fine for failure to submit required report. (NRS 649.053, 649.297) The holder of a license or a manager’s certificate who fails to submit a report required pursuant to this chapter or chapter 649 of NRS on or before the applicable due date for the report will be fined $10 per day until the report is properly submitted to the Commissioner of Financial Institutions.

(Added to NAC by Comm’r of Financial Institutions by R111-06, eff. 6-28-2006)