Michigan (MI) Collection Agency Manager
1. Q: What state agency regulates collection agencies in Michigan?
ANSWER The Michigan Department of Insurance and Financial Services
(DIFS) regulates collection agencies through the Occupational Code.
2. Q: What is the primary law governing collection agencies in Michigan?
ANSWER The Collection Practices Act (Public Act 299 of 1980), found in
MCL 339.901 et seq.
3. Q: Does Michigan require collection agencies to be licensed? ANSWER
Yes, collection agencies must be licensed under the Occupational Code as a
regulated business activity.
4. Q: What is the application fee for a collection agency license in
Michigan? ANSWER The application fee is $300 (subject to change; verify
with DIFS).
5. Q: How long is a Michigan collection agency license valid? ANSWER
The license is valid for one year and must be renewed annually.
6. Q: What is the renewal fee for a collection agency license? ANSWER
The annual renewal fee is $300 (subject to change; verify with DIFS).
7. Q: Are there bonding requirements for Michigan collection agencies?
ANSWER Yes, agencies must post a surety bond of $25,000 or more
depending on volume.
8. Q: What is the minimum bond amount required? ANSWER The
minimum bond amount is $25,000 for agencies collecting less than $1 million
annually.
,9. Q: Can an out-of-state collection agency collect debts from Michigan
residents? ANSWER Yes, but they must be licensed in Michigan if they are
collecting on behalf of Michigan creditors or from Michigan debtors.
10. Q: What constitutes "debt collection" under Michigan law? ANSWER
Any collection of money claimed to be owed to another person or entity.
11. Q: Are attorneys exempt from collection agency licensing? ANSWER
Yes, attorneys collecting debts in the course of their law practice are generally
exempt.
12. Q: Are banks exempt from collection agency licensing requirements?
ANSWER Yes, banks and financial institutions regulated by state or federal
banking laws are exempt.
13. Q: What is the penalty for operating without a license? ANSWER
Operating without a license is a misdemeanor punishable by fines up to $500
and/or imprisonment up to 90 days.
14. Q: Must individual collectors be licensed? ANSWER No, individual
employees do not need separate licenses, but the agency must be licensed.
15. Q: What records must be maintained for licensing purposes? ANSWER
Records of all debts collected, client agreements, consumer complaints, and
financial records.
16. Q: How long must records be retained? ANSWER Records must be
retained for at least three years.
17. Q: Can DIFS conduct inspections of collection agencies? ANSWER
Yes, DIFS has the authority to inspect records and investigate complaints.
18. Q: What are grounds for license denial? ANSWER Fraud,
misrepresentation, criminal convictions, previous license revocations, or failure
to meet requirements.
19. Q: Can a license be suspended or revoked? ANSWER Yes, for
violations of the Collection Practices Act or other applicable laws.
20. Q: What is the appeals process for license denial? ANSWER Applicants
can request a hearing before the Bureau of Professional Licensing within 60
days.
21. Q: Must collection agencies register with the Michigan Attorney
General? ANSWER No specific registration is required, but the AG can
investigate violations.
, 22. Q: Are there continuing education requirements for collection agency
managers? ANSWER Michigan does not mandate specific continuing
education, but professional development is recommended.
23. Q: What insurance is required for collection agencies? ANSWER
Errors and omissions insurance is recommended but not statutorily required.
24. Q: Can a convicted felon own a collection agency? ANSWER It depends
on the nature of the felony; DIFS reviews each case individually.
25. Q: What are the requirements for branch offices? ANSWER Each
location must be licensed separately.
26. Q: Is there a separate license for medical debt collection? ANSWER
No, the same collection agency license covers all types of debt.
27. Q: What happens if a license lapses? ANSWER The agency must cease
collection activities and may face penalties.
28. Q: Can licenses be transferred? ANSWER No, licenses are non-
transferable; new owners must apply for a new license.
29. Q: What is required to reinstate a lapsed license? ANSWER Payment
of all fees, late penalties, and meeting current requirements.
30. Q: Are there special requirements for collecting student loans?
ANSWER Federal student loan collection must comply with federal regulations
in addition to state law.
31. Q: What is the role of the Collection Practices Board? ANSWER The
board advises DIFS on licensing and regulatory matters.
32. Q: How many members are on the Collection Practices Board?
ANSWER The board typically has nine members representing various
stakeholder groups.
33. Q: Can a collection agency appeal regulatory decisions? ANSWER
Yes, through Michigan's administrative hearing process.
34. Q: What disclosure must be made in license applications? ANSWER
Full disclosure of ownership, criminal history, financial condition, and business
operations.
35. Q: Are there residency requirements for collection agency owners?
ANSWER No specific residency requirement exists.
1. Q: What state agency regulates collection agencies in Michigan?
ANSWER The Michigan Department of Insurance and Financial Services
(DIFS) regulates collection agencies through the Occupational Code.
2. Q: What is the primary law governing collection agencies in Michigan?
ANSWER The Collection Practices Act (Public Act 299 of 1980), found in
MCL 339.901 et seq.
3. Q: Does Michigan require collection agencies to be licensed? ANSWER
Yes, collection agencies must be licensed under the Occupational Code as a
regulated business activity.
4. Q: What is the application fee for a collection agency license in
Michigan? ANSWER The application fee is $300 (subject to change; verify
with DIFS).
5. Q: How long is a Michigan collection agency license valid? ANSWER
The license is valid for one year and must be renewed annually.
6. Q: What is the renewal fee for a collection agency license? ANSWER
The annual renewal fee is $300 (subject to change; verify with DIFS).
7. Q: Are there bonding requirements for Michigan collection agencies?
ANSWER Yes, agencies must post a surety bond of $25,000 or more
depending on volume.
8. Q: What is the minimum bond amount required? ANSWER The
minimum bond amount is $25,000 for agencies collecting less than $1 million
annually.
,9. Q: Can an out-of-state collection agency collect debts from Michigan
residents? ANSWER Yes, but they must be licensed in Michigan if they are
collecting on behalf of Michigan creditors or from Michigan debtors.
10. Q: What constitutes "debt collection" under Michigan law? ANSWER
Any collection of money claimed to be owed to another person or entity.
11. Q: Are attorneys exempt from collection agency licensing? ANSWER
Yes, attorneys collecting debts in the course of their law practice are generally
exempt.
12. Q: Are banks exempt from collection agency licensing requirements?
ANSWER Yes, banks and financial institutions regulated by state or federal
banking laws are exempt.
13. Q: What is the penalty for operating without a license? ANSWER
Operating without a license is a misdemeanor punishable by fines up to $500
and/or imprisonment up to 90 days.
14. Q: Must individual collectors be licensed? ANSWER No, individual
employees do not need separate licenses, but the agency must be licensed.
15. Q: What records must be maintained for licensing purposes? ANSWER
Records of all debts collected, client agreements, consumer complaints, and
financial records.
16. Q: How long must records be retained? ANSWER Records must be
retained for at least three years.
17. Q: Can DIFS conduct inspections of collection agencies? ANSWER
Yes, DIFS has the authority to inspect records and investigate complaints.
18. Q: What are grounds for license denial? ANSWER Fraud,
misrepresentation, criminal convictions, previous license revocations, or failure
to meet requirements.
19. Q: Can a license be suspended or revoked? ANSWER Yes, for
violations of the Collection Practices Act or other applicable laws.
20. Q: What is the appeals process for license denial? ANSWER Applicants
can request a hearing before the Bureau of Professional Licensing within 60
days.
21. Q: Must collection agencies register with the Michigan Attorney
General? ANSWER No specific registration is required, but the AG can
investigate violations.
, 22. Q: Are there continuing education requirements for collection agency
managers? ANSWER Michigan does not mandate specific continuing
education, but professional development is recommended.
23. Q: What insurance is required for collection agencies? ANSWER
Errors and omissions insurance is recommended but not statutorily required.
24. Q: Can a convicted felon own a collection agency? ANSWER It depends
on the nature of the felony; DIFS reviews each case individually.
25. Q: What are the requirements for branch offices? ANSWER Each
location must be licensed separately.
26. Q: Is there a separate license for medical debt collection? ANSWER
No, the same collection agency license covers all types of debt.
27. Q: What happens if a license lapses? ANSWER The agency must cease
collection activities and may face penalties.
28. Q: Can licenses be transferred? ANSWER No, licenses are non-
transferable; new owners must apply for a new license.
29. Q: What is required to reinstate a lapsed license? ANSWER Payment
of all fees, late penalties, and meeting current requirements.
30. Q: Are there special requirements for collecting student loans?
ANSWER Federal student loan collection must comply with federal regulations
in addition to state law.
31. Q: What is the role of the Collection Practices Board? ANSWER The
board advises DIFS on licensing and regulatory matters.
32. Q: How many members are on the Collection Practices Board?
ANSWER The board typically has nine members representing various
stakeholder groups.
33. Q: Can a collection agency appeal regulatory decisions? ANSWER
Yes, through Michigan's administrative hearing process.
34. Q: What disclosure must be made in license applications? ANSWER
Full disclosure of ownership, criminal history, financial condition, and business
operations.
35. Q: Are there residency requirements for collection agency owners?
ANSWER No specific residency requirement exists.
