New Mexico Collection Agency Regulatory Act

Chapter 61, Article 18A NMSA 1978 may be cited as the “Collection Agency Regulatory Act”.

History: Laws 1987, ch. 252, § 1; 2019, ch. 144, § 24.

As used in the Collection Agency Regulatory Act:

A. “division” means the financial institutions division of the regulation and licensing department;

B. “director” means the director of the division or a duly authorized agent designated by the director;

C. “collection agency” means a person engaging in business for the purpose of collecting or attempting to collect, directly or indirectly, debts owed or due or asserted to be owed or due another, where such person is so engaged by two or more creditors, or a person engaging in the business the principal purpose of which is the collection of debts. The term also includes a creditor who, in the process of collecting the creditor’s own debts, uses any name other than the creditor’s own that would indicate that a third person is collecting or attempting to collect the debts. The term does not include:

(1) an officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;

(2) a person while collecting debts for another person, both of whom are related by common ownership or affiliated by corporate control, if the person collects debts only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;

(3) an officer or employee of the United States, a state or a political subdivision thereof to the extent that collecting or attempting to collect a debt is in the performance of official duties;

(4) a person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of a debt;

(5) a nonprofit organization that, at the request of debtors, performs bona fide consumer credit counseling and assists debtors in the liquidation of their debts by receiving payments from such debtors and distributing such amounts to creditors;

(6) an attorney-at-law collecting a debt as an attorney on behalf of and in the name of a client; or

(7) a person collecting or attempting to collect a debt owed or due or asserted to be owed or due to another to the extent such activity:

(a) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement;

(b) concerns a debt that was originated by such person;

(c) concerns a debt that was not in default at the time it was obtained by such person; or

(d) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor;

D. “communication” means the conveying of information regarding a debt directly or indirectly to a person through any medium;

E. “creditor” means a person who offers or extends credit creating a debt or to whom a debt is owed, but the term does not include a person to the extent that the person receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another;

F. “debt” means an obligation or alleged obligation of a debtor to pay money arising out of a transaction in which the money, property, insurance or services that are the subject of the transaction are primarily for personal, family or household purposes, whether or not such obligation has been reduced to judgment;

G. “debt collector” means a collection agency, a repossessor, a manager, a solicitor and an attorney-at-law collecting a debt as an attorney on behalf of and in the name of a client;

H. “debtor” means a natural person obligated or allegedly obligated to pay a debt;

I. “location information” means a debtor’s place of abode and the telephone number at such place or the debtor’s place of employment;

J. “manager” means a natural person who qualifies under the Collection Agency Regulatory Act to be in full-time charge of a licensed collection agency and to whom a manager’s license has been issued by the director;

K. “nationwide multistate licensing system and registry” means a licensing system developed and maintained by the conference of state bank supervisors and the American association of residential mortgage regulators pursuant to the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 to manage mortgage licenses and other financial services licenses, or a successor registry;

L. “person” means an individual, corporation, partnership, association, joint-stock company, trust where the interests of the beneficiaries are evidenced by a security, unincorporated organization, government or political subdivision of a government;

M. “repossessor” means a person engaged solely in the business of repossessing personal property for others for a fee. The term does not include a duly licensed collection agency; and

N. “solicitor” means a natural person who, through lawful means, communicates with debtors or solicits the payment of debts for a collection agency licensee by the use of telephone, personal contact, letters or other methods of collection conducted from and within the licensee’s office.

History: Laws 1987, ch. 252, § 2; 2019, ch. 144, § 25; 2021, ch. 31, § 12.

A. The administration and enforcement of the Collection Agency Regulatory Act shall be vested in the office of the director as set forth in that act.

B. The director shall investigate violations or alleged violations of the Collection Agency Regulatory Act by persons engaged in business as collection agencies or repossessors who fail to obtain licenses.

C. The director may examine the business and the books, accounts, records and files used therein by a collection agency licensee, and for such purpose, the director shall have free access to the offices, places of business, books, accounts, records, papers, files, safes and vaults of all licensees and other persons engaging or attempting to engage in business as a collection agency.

D. Any examination reports or other documents or information developed in administration of this section are confidential and not subject to subpoena.

E. Applicants for a license issued pursuant to the Collection Agency Regulatory Act shall apply on a form prescribed by the director. Information required on the form shall be set forth by rule, instruction or procedure of the director and may be changed or updated as necessary by the director in order to carry out the purposes of the Collection Agency Regulatory Act.

F. In order to fulfill the purposes of the Collection Agency Regulatory Act, the director may establish relationships or contracts with the nationwide multistate licensing system and registry or other entities designated by the nationwide multistate licensing system and registry to collect and maintain records and process transaction fees or other fees related to licenses issued pursuant to the Collection Agency Regulatory Act.

G. An applicant for a license pursuant to the Collection Agency Regulatory Act shall, at a minimum, furnish to the nationwide multistate licensing system and registry information concerning the applicants identity, including:

(1) the applicant’s personal history and experience in a form prescribed by the nationwide multistate licensing system and registry; and

(2) authorization for the nationwide multistate licensing system and registry and the director to obtain information related to any administrative, civil or criminal findings by any governmental

jurisdiction regarding the applicant.

H. The director may use the nationwide multistate licensing system and registry as a channeling agent for requesting and distributing information provided pursuant to Paragraphs (1) and (2) of Subsection G of this section to and from any source as deemed appropriate by the director.

History: Laws 1987, ch. 252, § 3; 2019, ch. 144, § 26.

A. The director shall promulgate rules in accordance with the State Rules Act [Chapter 14, Article 4 NMSA 1978] and enforce those rules as are reasonable or necessary for the examination and licensing of collection agencies, repossessors, managers and solicitors, for the conduct of such persons and for the general enforcement of the various provisions of the Collection Agency Regulatory Act in the protection of the public.

B. The violation of any provisions of the Collection Agency Regulatory Act or of rules promulgated by the director is sufficient ground for revocation of a license or for other disciplinary action as provided in the Uniform Licensing Act [Chapter 61, Article 1 NMSA 1978].

C. A provision of the Collection Agency Regulatory Act imposing a liability shall not apply to an act done or omitted in good faith in conformity with a rule of the director, notwithstanding that after the act or omission has occurred, the rule is amended, rescinded or determined by judicial or other authority to be invalid for any reason.

History: Laws 1987, ch. 252, § 4; 2022, ch. 39, § 84.

A. No person shall conduct within this state a collection agency, act as a collection agency manager or engage within the state in the business of collecting claims for others or of soliciting the right to collect or receive payment from another of any claim or advertise or solicit either in print, by letter, in person or otherwise, the right to collect or receive payment for another of any claim or seek to make collection or obtain payment of any claim on behalf of another without having first applied for and obtained the licenses required by the Collection Agency Regulatory Act.

B. No person shall conduct within this state the business of a repossessor without having first applied for and obtained a repossessor’s license.

C. No person shall be considered to be engaged in collection activity within this state if that person’s activities regarding this state are limited to collecting debts not incurred in New Mexico from debtors located in this state by means of interstate communications, including telephone, mail or facsimile transmission, from the person’s location in another state.

History: Laws 1987, ch. 252, § 5; 1993, ch. 213, § 1.

A. In addition to any other penalty, any person or any officer or director of any partnership, corporation or association conducting business as a collection agency or repossessor without first having been licensed pursuant to the Collection Agency Regulatory Act or who carries on such business after the revocation or expiration of any license which the director has refused to renew, is guilty of a fourth degree felony.

B. Any person violating any other provision of that act is guilty of a misdemeanor.

History: Laws 1987, ch. 252, § 6.

A. Application for a collection agency license, repossessor’s license or manager’s license shall be

made to the director in such form as may be required by the director.

B. Applicants for an original license issued pursuant to the Collection Agency Regulatory Act for the period beginning July 1, 2020 and ending December 31, 2020 shall pay an amount equal to one- half of the original license fee for the applicable license as established pursuant to Section 61-18A-30 NMSA 1978.

C. Applicants for renewal of a license issued pursuant to the Collection Agency Regulatory Act with an expiration date of June 30, 2020 may apply for renewal of the license for the period beginning July 1, 2020 and ending December 31, 2020 and shall pay an amount equal to one-half of the renewal license fee for the applicable license as established pursuant to Section 61-18A-30 NMSA 1978.

D. Applicants for all licenses issued pursuant to the Collection Agency Regulatory Act beginning on or after January 1, 2021, and ending at the conclusion of the calendar year for which the license may be issued, shall pay an amount equal to the applicable original or renewal license fee as established pursuant to Section 61-18A-30 NMSA 1978.

History: Laws 1987, ch. 252, § 7; 1993, ch. 213, § 2; 2019, ch. 144, § 27.

A. The application for a collection agency license shall state, among other things that may be required, the name of the applicant together with the name under which the applicant will do business and the location by street number and city in this state of the office of the business for which the license is sought.

B. The application shall state:

(1) in the case of an individual, the full residence address of the applicant;

(2) in the case of a partnership, the true names and complete residence addresses of all partners;

(3) in the case of a corporation, the true names and complete residence addresses of all directors and officers and the true names and residence addresses of all holders of ten percent or more of the corporation’s outstanding stock and other securities and the number of shares or units of

each and of all classes held by each and the total number of shares or units of each class issued and outstanding; and

(4) in the case of a nonstock corporation or an unincorporated association, the true names and complete residence addresses of all officers, directors and trustees.

C. The application shall state the name of the licensed manager who will be actively in charge of the collection agency for which the license is sought.

D. The director may establish, by rule, regulation or order, requirements for a license application as necessary, including:

(1) background checks for criminal history through fingerprint or other databases;

(2) civil or administrative records;

(3) credit history; and

(4) other information as deemed relevant and necessary by the director.

History: Laws 1987, ch. 252, § 8; 2019, ch. 144, § 28.

The application for a collection agency license shall be accompanied by a financial statement of the applicant up to not more than sixty days prior to date of application for a new license or renewal, showing the assets and liabilities of the applicant and truly reflecting that that applicant’s net worth is not less than the sum of ten thousand dollars ($10,000), and that its liquid assets are not less than one thousand dollars ($1,000) available for use in licensee’s business. The financial statement shall be sworn to by the applicant, if the applicant is an individual or by a partner, director, manager or trustee in its behalf, if the applicant is a partnership, corporation or unincorporated association. The information contained in the financial statement shall be confidential and not a public record.

History: Laws 1987, ch. 252, § 9.

A. An applicant for a manager’s license shall be examined concerning his competency, experience and knowledge of law and regulations by the director and on such pertinent subjects as the director shall require.

B. Examinations shall be practical in character and of such length, scope and character as the director deems necessary to determine the fitness of applicants to engage in the general collection agency business. Both questions and answers shall be in the English language.

C. The director shall prepare or cause to be prepared all examination material. The number and character of the questions, examination procedure, method of grading and the passing grade to be attained by successful applicants shall be determined by the director.

D. The examination papers of any person shall be kept for a period of one year and may then be destroyed. The examination papers shall be open to inspection during the one-year period only by the director, the staff of the financial institutions division of the regulation and licensing department and by the applicant or by someone appointed by the latter to inspect them, or by a court of competent jurisdiction in a proceeding where the contents of the papers are properly involved.

History: Laws 1987, ch. 252, § 10.

The licensed manager to be actively in charge of a collection agency shall:

A. have reached the age of majority;

B. not have been convicted of a felony or crime involving moral turpitude;

C. be a graduate of a high school or provide proof to the director that the licensed manager is possessed of the equivalent of a high school education;

D. pass the examination required;

E. pay the examination fee to the director;

F. have been actively and continuously engaged or employed in the collection of accounts receivable for at least two of the five years next preceding the filing of the application; and

G. have a good credit record.

History: Laws 1987, ch. 252, § 11; 1999, ch. 272, § 30; 2021, ch. 70, § 10.

No application for license shall be approved by the director unless the applicant has met all requirements of the Collection Agency Regulatory Act and any rules and regulations established thereunder. When said requirements have been met, the director shall grant and issue a license in the form provided by the Collection Agency Regulatory Act.

History: Laws 1987, ch. 252, § 12.

The director may deny any license:

A. if the applicant has ever had a license or its equivalent revoked;

B. if the applicant is or was a partner, officer, director, trustee, manager or stockholder of any partnership, corporation or unincorporated association the license of which has been revoked;

C. if the applicant or a partner, officer, director, trustee, stockholder or employee of the applicant has been convicted of a felony or any crime involving moral turpitude; or

D. if the applicant has violated any provision of the Collection Agency Regulatory Act or rules and regulations established thereunder.

History: Laws 1987, ch. 252, § 13.

No collection agency license shall be issued to any foreign corporation or partnership unless it has fully complied with the laws of the state of New Mexico so as to entitle it to do business in the state; provided that the foreign corporation or partnership shall establish and maintain a collection agency in New Mexico at all times during the life of any collection agency license issued to the foreign corporation or partnership. All records of the collection agency located in New Mexico shall be maintained at the collection agency’s principal office in New Mexico unless the collection agency records are maintained electronically, in which case, electronic records may be maintained at a location where the collection agency regularly maintains records.

History: Laws 1987, ch. 252, § 14; 2012, ch. 11, § 1.

A. Prior to the issuance of any collection agency or repossessor’s license or renewal thereof a surety bond in the penal sum of five thousand dollars ($5,000), which may by regulation or order of the director be increased, shall be filed with the division. The bond shall run to the people of the state of New Mexico, shall be executed and acknowledged by the applicant as principal and by a corporation which is licensed by the superintendent of insurance of this state to transact the business of fidelity and surety insurance, as surety.

B. The surety bond shall provide for suit thereon by any person who has a cause of action under the Collection Agency Regulatory Act or rules and regulations established thereunder.

C. No action shall be brought upon any bond after the expiration of three years from the date of the occurrence of the act upon which a claim is based.

D. The bond shall be continuous in form and remain in full force and effect concurrently with the license and any renewals thereof unless terminated or canceled by action of the surety as provided in the Collection Agency Regulatory Act.

E. Upon the filing of thirty days’ written notice with the director by any surety company of its withdrawal as the surety of any licensee, the director shall forthwith give notice to the licensee of the withdrawal which notice shall be by certified mail with request for return receipt and shall be addressed to the licensee at its main office in New Mexico as shown by the records of the director. The license of any licensee shall be void upon the termination of the bond by the surety company unless, prior to termination, a new bond has been filed with the division.

F. Should the license of any company to transact fidelity and surety insurance business in this state be canceled, revoked or otherwise terminated, all collection agency bonds for which such surety company is surety are thereupon and thereby canceled. Upon such cancellation, the license of any licensee having such a bond posted is suspended and shall remain suspended until a new and valid bond is filed, provided however that failure of any such licensee to file a new bond within thirty days after being advised by the director in writing of the necessity of doing so shall ipso facto revoke the license.

History: Laws 1987, ch. 252, § 15.

The license when issued shall state:

A. that it is issued pursuant to the Collection Agency Regulatory Act and the rules and regulations established thereunder and that the licensee is duly authorized to conduct business under the Collection Agency Regulatory Act;

B. the names of the owners of the licensee, if a sole proprietorship or partnership; and if a corporation, the name shall be followed by the words “a corporation”;

C. the name under which the licensee is to operate;

D. the location by street number, city, county and state where the licensee is to conduct business; and

E. the number and the date of the license.

History: Laws 1987, ch. 252, § 16.

Upon receipt of the license, the licensee has the right to conduct the business of a collection agency, repossessor, manager or solicitor with all the powers and privileges applicable thereto, contained in but subject always to all the provisions of the Collection Agency Regulatory Act and any rules and regulations established thereunder.

History: Laws 1987, ch. 252, § 17.

A. Upon any change of street address from that stated in the collection agency or repossessor

license or any change of the business name therein shown, the licensee shall, within five days thereafter, deposit the license and written notification of the change of address or name, together with the duplicate license fee with the director.

The director shall thereupon enter the change in his records, retain and file the surrendered license and issue to the licensee a duplicate license setting forth the new name or address, or both, but bearing the same date and number as the surrendered license.

If the license is not deposited with the director within the time prescribed, then upon the lapse of the five-day period the license shall be and remain suspended until so deposited.

B. Upon any change of ownership of a licensee, if a sole proprietorship or partnership, or upon any change of ownership of more than fifty percent of the shares or voting rights, if a corporation, all licenses issued to a licensee are void unless, prior to such change of ownership, the prospective new owners have notified the director of the proposed acquisition have satisfied the director that they qualify to be licensed pursuant to the Collection Agency Regulatory Act.

C. Every licensed corporation and unincorporated association shall promptly file with the director a written report of any transfer, issuance, cancellation or redemption of stock voting rights or membership amounting to ten percent or more of the total voting stock or memberships then outstanding.

History: Laws 1987, ch. 252, § 19.

For the purpose of winding up the affairs and discontinuance or sale of the business of a licensee, in the event of death of the licensed manager or dissolution of a partnership, the director shall, upon proper application, issue a temporary license to the personal representative or, to the nominee of the personal representative of the deceased or to a surviving partner in the case of the dissolution of a partnership. The application shall be in writing, subscribed and sworn to by the person to whom the temporary license is to be issued. The application shall be accompanied by the temporary license fee specified in the Collection Agency Regulatory Act. A temporary license shall be effective for a period of one year and shall not thereafter be renewed or continued.

History: Laws 1987, ch. 252, § 20.

Application for a license for a branch office or offices may be made by any licensee. The application shall state the location and address of the branch office and the name and address of the person to be actively in charge. The application shall be accompanied by a rider or endorsement to the licensee’s surety bond increasing the penal sum of the bond by five thousand dollars ($5,000) and a license fee in the same amount as required for the principal office.

History: Laws 1987, ch. 252, § 21.

A. Every licensed office of a collection agency, whether a principal or branch office, shall be under the active charge of a licensed manager. Each manager’s license shall be issued by the director upon qualification by the applicant and shall be renewed annually upon application accompanied by the manager’s renewal license fee, which application is to be filed with the division on or before November 30 of each year. Unless so renewed, each manager’s license shall expire on January 1 unless previously revoked or canceled.

B. As used in this section, “under the active charge of a licensed manager” means that a licensed manager shall be physically present at the licensee’s office at least seventy-five percent of the time during which the office is open for business.

History: Laws 1987, ch. 252, § 22; 2019, ch. 144, § 29.

Whenever a licensed manager ceases to be in charge of an office, the licensee shall notify the director in writing within ten days from such cessation.

If the notice is given, the collection agency license shall remain in force for a reasonable period to be determined by the rules and regulations. If the licensee fails to give the notice as required at the end of the ten-day period the collection agency license shall be ipso facto suspended, but the license shall be reinstated upon the filing of an affidavit by the licensee to the effect that the person formerly in charge of the office has been replaced by a licensed manager.

History: Laws 1987, ch. 252, § 23.

No person, who is not a duly licensed and qualified collection agency, shall print, publish or otherwise prepare for distribution any system of collection letters, demand forms or other printed matter upon his stationery or upon stationery upon which the said person’s name appears in such a manner as to indicate that a demand is being made by such person for the payment of any sums due or asserted to be due, where such forms containing such message are to be sold or furnished to anyone by such other person at any address different from the address of the person issuing such system of collection letters, demand forms or other printed material.

History: Laws 1987, ch. 252, § 25.

Nothing in the Collection Agency Regulatory Act shall be construed to prevent collection agencies from taking assignments of claims in their own name as real parties in interest for the purpose of billing and collection and bringing suit in their own names; provided that no suit allowed by this section may be instituted on behalf of a collection agency in a court unless the collection agency appears by a duly authorized and licensed attorney-at-law.

History: Laws 1987, ch. 252, § 26; 2021, ch. 31, § 13.

A. A licensee desiring renewal of the licensee’s license shall, on or before November 30 of each year, file with the director an application for renewal on forms as may be designated by the director. The application shall be accompanied by the renewal fee.

B. The director shall issue a renewal license that shall be dated January 1 next ensuing and shall bear the date to and including which the license is renewed.

History: Laws 1987, ch. 252, § 27; 2019, ch. 144, § 30.

All collection agencies shall remit to their clients the proceeds of all collections, after deducting their commission, other lawful expenses and any amounts collected pursuant to Section 61-18A-28.1 NMSA 1978, within forty days of such collection unless otherwise provided by regulation.

History: Laws 1987, ch. 252, § 28; 1992, ch. 36, § 1.

A. Unless the agreement between the debtor and the creditor or the agreement between the collection agency and the creditor otherwise expressly prohibits, a collection agency may collect from the debtor an amount equal to the gross receipts tax and the local option gross receipts taxes, as those terms are defined in the Gross Receipts and Compensating Tax Act [7-9-1 NMSA 1978], imposed on the receipts of the collection agency that result from the collection of a debt from the debtor.

B. For purposes of this section, a collection agency does not mean a person who collects his own

debts using a name other than his own which would indicate that a third person is collecting or attempting to collect such debts.

History: 1978 Comp., § 61-18A-28.1, enacted by Laws 1992, ch. 36, § 2.

Except as provided in Section 61-1-34 NMSA 1978, the director shall charge and collect the following fees:

A. an original license fee for a collection agency or branch thereof, of five hundred dollars ($500);

B. a renewal fee for a collection agency or branch thereof, of three hundred dollars ($300);

C. a duplicate license fee of fifteen dollars ($15.00);

D. a temporary license fee of thirty-five dollars ($35.00);

E. a delinquency fee of ten dollars ($10.00) per day for each day of delinquency in filing applications for renewals;

F. a manager’s license examination fee of one hundred dollars ($100);

G. a manager’s license renewal fee of fifty dollars ($50.00);

H. a fee of five dollars ($5.00) for each copy of any issue or edition of the Collection Agency Regulatory Act and rules and regulations;

I. a fee of five dollars ($5.00) for each list of licensees in good standing;

J. a fee of two hundred dollars ($200) per day or fraction thereof for each examiner of the division engaged in an examination or investigation of a licensee, not to exceed five examiner-days per calendar year. If the examination or investigation is an out-of-state examination or investigation, the licensee shall reimburse the division the actual travel costs incurred to perform the examination or investigation; and

K. an original license fee or renewal license fee for a repossessor of two hundred fifty dollars ($250).

History: Laws 1987, ch. 252, § 30; 1993, ch. 213, § 3; 2020, ch. 6, § 47.

All money received under the Collection Agency Regulatory Act by the director shall be deposited in the general fund.

History: Laws 1987, ch. 252, § 31; 2022, ch. 39, § 85.

A person aggrieved by the decision of the director in the enforcement of the Collection Agency

Regulatory Act [61-18A-1 NMSA 1978] may obtain judicial review in the district court pursuant to the provisions of Section 39-3-1.1 NMSA 1978.

History: Laws 1987, ch. 252, § 32; 1998, ch. 55, § 76; 1999, ch. 265, § 77.

Any person properly licensed pursuant to the Collection Agency Act [61-18A-1 NMSA 1978] on the effective date of the enactment of the Collection Agency Regulatory Act is eligible to be granted a license under the provisions of the Collection Agency Regulatory Act.

History: Laws 1987, ch. 252, § 33.