Collection Agencies, Managers and Repossesors: FAQs
General Consumer Questions:
Q: How do I verify that a Collection Agency or Repossessor is licensed in New Mexico?
To verify if a collection agency or repossessor is licensed to operate in New Mexico use the licensee search function on our website. For detailed instructions on how to use the licensee search, click here.
Collection Agencies:
Q: What is a Collection Agency?
A collection agency means any 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. The term also includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts.
Q: Are third party mortgage loan servicers required to obtain a collection agency license?
Depends. Pursuant to §61-18A-2 (C) (7) (c) NMSA 1978, the definition of a collection agency does not include a third party servicer of debt of which was not in default at the time the debt was obtained. Based upon the statutory definition, third party mortgage servicers are not required to be licensed in New Mexico as long as any loan serviced by such servicer was not in default upon obtaining it.
Q: As a Collection Agency, am I required to have a surety bond?
Yes, collection agencies are required to maintain a surety bond of $5,000 or an amount equal to the proceeds due clients for at least two average collections during the previous year not to exceed $25,000. An additional $5,000 surety bond is required for each branch licensed. To calculate the required bond amount, utilze the Surety Bond Calculator available on the Division's website.
Q. As a Collection Agency, am I required to maintain a New Mexico Office?
Yes, Collection Agencies are required to maintain a New Mexico office to which the licensed Collection Agency Manager must be physically present at least seventy-five percent (75%) of the time during which the office is open for business.
Q: As a Collection Agency, am I required to obtain a license for each of my branches?
Yes, applications are available in the “Forms and Applications” section.
Q: What rules and laws do Collection Agencies have to abide by?
Collection agencies in New Mexico fall under the New Mexico Collection Agencies Regulatory Act as well as the Fair Debt Collection Practices Act.
Q: What is required for a address change for a Collection Agency, Branch, or Manager License?
It is a requirement to send a letter requesting permission from the Financial Institutions Division, along with a fee in the amount of $15.
Q: What is required to surrender a Collection Agency, Branch or Manager License?
To surrender a Collection Agency, Branch, or Manager license, a licensee must submit a letter on company letterhead to the Director of the Financial Institutions Division along with a copy of the surrendered license. The letter must provide detailed information as to the reason for license surrender and the collection of any outstanding accounts.
Collection Agency Managers:
Q: What qualifications does a management applicant need to have?
A management applicant needs to be a US citizen, a resident of New Mexico, reached the age of majority, not have been convicted of a felony or crime involving moral turpitude, be a high school graduate or equivalent high school education, pass the examination, pay the examination fee, 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 possess good credit.
Q: Is a Management applicant required to complete an Examination as part of licensure?
Yes, the Financial Institutions Division does administer a test to all new Collection Agency Manager applicants. The test costs $100 and is available by appointment only.
Repossessors:
Q: Does a Towing License from the New Mexico Public Regulation Commission authorize my company to repossess vehicles in New Mexico?
No, a person must obtain a Repossessors license from the Director of the Financial Institutions Division prior to conducting vehicle repossessions.
Q: As a Repossessor, am I required to have a surety bond?
Yes, you are required to obtain a surety bond in the amount of $5,000.00.
Q: What is required for a address change for a Repossessor License?
It is a requirement to send a letter requesting permission from the Financial Institutions Division, along with a fee in the amount of $15.
Q: What process must I follow if I wish to surrender my license?
To surrender a Repossessor license, a licensee must submit a letter on company letterhead to the Director of the Financial Institutions Division along with a copy of the surrendered license. The letter must detailed information as for the reason for license surrender.