Connecticut House Bill HB05400

Connecticut 2018 Regular Session

• Introduced: 3/1/18
• Refer: 3/1/18

Caption

An Act Concerning Licensing Requirements For Consumer Collection Agencies.

Impact

Upon passage, this bill is set to impact the landscape of licensing for consumer collection agencies considerably. By removing the tangible net worth requirement, it allows a broader range of individuals and smaller firms to operate as collection agencies, potentially increasing the number of agencies in the industry. While proponents of the bill argue that this will create more options for consumers seeking collection services, critics warn it may lead to a proliferation of inadequately funded agencies, which could adversely impact consumer protections and the integrity of the industry.

Summary

House Bill 5400 aims to amend the licensing requirements for consumer collection agencies in the state. The bill proposes to eliminate the previous mandate that applicants for such licenses must demonstrate a minimum tangible net worth of fifty thousand dollars. This change is intended to facilitate entry into the industry for new and existing collection agencies by reducing the financial barriers that could prevent capable operators from obtaining necessary licenses. The underlying goal of the bill is to promote competition and accessibility within the debt collection market.

Contention

The discussions around HB 5400 highlight various points of contention. Supporters claim that stricter financial requirements may not necessarily correlate with better practices in the debt collection process. They argue that expert training and accountability should take precedence over financial thresholds. Conversely, opponents of the bill worry that without minimum financial standards, there is a risk of increasing instances of unethical debt collection practices and greater hardship for consumers. They express concerns that reducing barriers may allow financially irresponsible entities into the market, leading to potential infringements on consumer rights.