As of January 2, 2017, Arizona collection agencies submit license applications via the Nationwide Multistate Licensing System (NMLS). Arizona joined many states in the U.S. that use the NMLS as a tool for financial institutions to submit licensing information.
Getting a license
Though applicants submit their information to the NMLS, the agency that grants Arizona collection agencies’ licenses is the state Department of Financial Institutions (AZDFI). Here’s some of the information the state asks for on the application:
- Legal name approved by the Secretary of State or Arizona Corporation Commission
- Background checks for anyone with 20%�ownership or more
- List of owners and indirect owners
- List of executive officers, partners, etc.
- Name of business’s CPA
- Surety bond
If an agency is applying to do business at more than one location, the applicant needs to submit�branch applications for each additional location. The application comes with a nonrefundable $1,500 fee, plus $500 per branch location. The licensing year is from January 1 through December 31. Agencies can renew their license from November 15 through January 1 with no penalty, and until January 31 with a penalty. Collection agencies’ license renewal is $600, plus $200 per branch location renewal. Fees are also assessed if the agency changes its name, address, or active managers.
Arizona collection agencies are required to keep a record of any fake names used by debt collectors, and submit thefictitious names report twice a year on July 1 and December 31. The report should list the collectors’ names, any fake names they use, and their home address.
How much does the Arizona collection agency surety bond cost?
The collection agency surety bond amount is determined by the gross annual income of the agency in the preceding year, as follows:
- No more than $250,000 in annual income�$10,000 surety bond
- $250,001-$500,000�$15,000 bond
- $500,001-$750,000�$25,000 bond
- $750,001 or more�$35,000 bond
This surety bond is collection agencies’ guarantee that they will pay their clients any funds collected within thirty days of collection, minus the agency’s fees. If the total amount collected is less than five dollars, then payment can be delayed another thirty days.
The cost of Arizona collection agencies’ bonds varies, since the bond amount varies. Qualified applicants applying for a bond can expect to pay 1-5% of the bond’s total amount�that’s anywhere from $250-$1,250 for a $25,000 surety bond.
More questions about the license? Get in touch with AZDFI. Questions about getting bonded? Get in touch with Single Source Insurance today!