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Debt Services
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Pursuant to Minnesota Statutes 332.365, the Department of Commerce has now posted a document on the department website that includes the contact information for nonprofit organizations domiciled in Minnesota that provide credit counseling services to debtors.
Credit counseling services include but are not limited to (1) helping debtors understand their rights and responsibilities, and (2) working with debtors, creditors, and collection agencies to satisfy debts.
Per the statute, the document must be included in the initial written communication and that the format is no more than one 8-1/2 by 11-inch sheet of paper.
Minnesota Statutes 332.365, Subdivision 2 requires that a collection agency must include the document described in subdivision 1, with the initial written communication sent to a debtor, if the initial communication is performed via United States mail, e-mail, or text message.
The document may be updated for the first time by the commissioner no earlier than September 1, 2024. Collection agencies must meet the requirements of subdivision 2 on or after September 1, 2023.
A Credit Services Organization is a business that, for a fee, offers the following services to consumers: improving the consumer's credit rating or history, obtaining credit for the consumer, or providing credit advice or assistance to the consumer.
The department licenses these organizations and provides regulatory oversight.
Apply
- Minnesota uses the Nationwide Mulitstate Licensing System (NMLS). Organizations applying for a Credit Service Organization (CSO) License are required to use the NMLS.
- View the Credit Services Organization checklist of requirements.
- Please Read Minnesota Statute §332.60 before applying for a Credit Service Organization License. Unlicensed activity may result in administrative action.
- An Electronic Surety Bond (ESB) for $10,000 must be filed in NMLS.
- How to file an ESB in NMLS
The commissioner may accept a deposit in cash, or securities that may be legally purchased by savings banks or for trust funds of an aggregate market value equal to the bond requirement, in lieu of the surety bond. The cash or securities must be deposited with the commissioner of finance.
$1,000 registration fee for each location of business.
Renewal
- Licenses issued under Chapter 332.52 to 332.60 expire annually on June 30. The renewal fee is $1,000 for each location of business.
- The Department of Commerce will send renewal notees to licensees in May of each year.
- Licensees must also renew their NMLS registration each year between November 1 and December 31.
- Renewal is done through NMLS.
Debt Management Services Providers help aid over-extended consumers with financial planning by developing a budget and receiving funds from the consumer to repay creditors under a specific plan.
You are a Debt Management Services Provider and need to be registered (whether or not you are located in Minnesota) if you provide any one or more of the following services in connection with debt incurred primarily for personal, family, or household services:
- Managing the financial affairs of an individual by distributing income or money to the individual's creditors;
- Receiving funds for the purpose of distributing the funds among creditors in payment or partial payment of obligations of a debtor; or
- Adjusting, prorating, pooling, or liquidating the indebtedness of a debtor.
- Any person so engaged or holding out as so engaged is deemed to be engaged in the provision of debt management services regardless of whether or not a fee is charged for such services.
Commerce registers these companies and provides regulatory oversight to ensure fair business practices.
A Debt Management Services Provider, under Chapter Minnesota Statute §332A, must obtain a license from the Minnesota Department of Commerce. A physical presence in Minnesota is not required.
Apply
Minnesota uses the Nationwide Mulitstate Licensing System (NMLS). Organizations applying for a Debt Management Services License are required to use the NMLS.
View the Debt Management checklist of requirements.
Please Read Minnesota Statute §332.60 before applying for a Debt Management Services License. Unlicensed activity may result in administrative action.
An Electronic Surety Bond (ESB) for $5,000 must be filed in NMLS.
The commissioner may accept a deposit in cash, or securities that may legally be purchased by savings banks or for trust funds of an aggregate market value equal to the bond requirement, in lieu of the surety bond. The cash or securities must be deposited with the commissioner of management and budget.
The commissioner may also require a fidelity bond in an appropriate amount covering employees of any applicant.
Each branch office or additional place of business in this state of an applicant must be bonded as provided in this subdivision.
Renewal
Licenses issued under Chapter Minnesota Statute §332A expire annually on December 31 and are renewable on January 1 of each year after that date. The renewal fee is $250. Renewal is done through NMLS.
An annual report will be sent to registrants at the email address provided on the Company MU1 in November of each year and will be due by March 15 of each calendar year.
A Debt Settlement Services Provider means any person offering or providing debt settlement services to a debtor domiciled in this state, regardless of whether or not a fee is charged for the service and regardless of whether the person maintains a physical presence in the state.
Debt Settlement Services means any one or more of the following activities:
- Offering to provide advice, or offering to act or acting as an intermediary between a debtor and one or more of the debtor’s creditors, where the primary purpose of the advice or action is to obtain a settlement for less than the full amount of debt, whether in principal, interest, fees, or other charges, incurred primarily for personal, family, or household purposes including, but no limited to, offering debt negotiation, debt reduction, or debt relief services;
- Advising, encouraging, assisting, or counseling a debtor to accumulate funds in an account for future payment of a reduced amount of debt to one or more of the debtor’s creditors’; or
- Offering to provide advice or offering to act or acting as an intermediary between a debtor and the federal government, state government, or their policitical subdivisions to delay payment of delinquent taxes owed, establish a payment plan for delinquen taxes owed, or obtain a settlement for less than the full amount of delinquent taxes owed.
A Debt Settlement Services Provider, pursuant to Minnesota Statute §332B, must obtain a registration from the Minnesota Department of Commerce. A physical presence in Minnesota is not required.
Apply
Minnesota uses the Nationwide Multistate Licensing System (NMLS). Organizations applying for a Debt Settlement License are required to use the NMLS.
Please read Minnesota Statute §332B before applying for a Debt Settlement Services License. Unlicensed activity may result in administrative action.
An Electronic Surety Bond (ESB) for $5,000 must be filed in NMLS.
The commissioner may accept a deposit in cash, or securities that may legally be purchased by savings banks or for trust funds of an aggregate market value equal to the bond requirement, in lieu of the surety bond. The cash or securities must be deposited with the commissioner of management and budget.
The commissioner may also require a fidelity bond in an appropriate amount covering employees of any applicant.
Each branch office or additional place of business in this state of an applicant must be bonded as provided in this subdivision.
Renewal
Licenses issued under Minnesota Statute §332B expire annually on December 31 and are renewable on January 1 of each year. The renewal fee is $250. Renewal is done through NMLS.
An annual report will be sent to registrants at the email address provided on the Company MU1 in November of each year and will be due by March 15th of each calendar year.