How to Obtain an Illinois Collection Agency License
All entities that want to offer debt collection services in Illinois have to go through a licensing procedure. It is handled by the state Department of Financial and Professional Regulation (IDFPR).
If you’re thinking of starting such a business, you need to obtain an Illinois collection agency license. This is how state authorities verify your legal and administrative compliance. As a part of this process, you have to provide an Illinois collection agency bond. It ensures that the interests of your customers will be protected.
Below you can find the essentials about the requirements and the steps you have to take to launch your debt collection agency.
The licensing criteria for Illinois collection agencies
In order to obtain an Illinois debt agency license from the Collection Agency Licensing and Disciplinary Board at the IDFPR, also known as collection agency registration, you have to provide proof that you meet all of its requirements. Thus, the Department checks if you are suitable to conduct the activities of a debt collector. The license requires you to abide by the state Collection Agency Act and any other applicable legislation.
As a first step, you have to fill in the application form. Together with it, you have to supply a range of information and documents, including:
- Personal and business history – for all partners, owners, and officers
- Business entity formation documents
- Employee identity listing (if a pseudonym is used)
- Financial statement (assets must equal liabilities plus net worth)
- Trust account financial report
- $25,000 surety bond
- Application fee of $750
The trust account has to be maintained at all times during your licensing period. It must always contain enough funds to make due payments to your customers. The financial report is necessary for your first application. You also have to provide one every year.
If you want to operate more than one office, you have to obtain a registration for each additional branch.
The licensing period runs for three years. You have to renew your license before May 31st of the expiration year.
Fulfilling the bonding requirement
You have to provide a $25,000 surety bond, so that you can get an Illinois collection agency license. Getting bonded means that you have to pay a fraction of this bond amount, which is called the premium. It is determined after careful consideration of your personal and business finances.
The rates for applicants with stable profiles are usually between 0.75% and 5%. Thus, your premium can be between $187 and $1,250 if your overall financial situation is solid.
The bond is a security mechanism that is designed to protect the state and your customers against potential illegal actions you may commit. More specifically, in the case of debt collectors, this entails protection against non-remittance of collected debts to the creditors. In such situations, the harmed party needs to obtain a court judgment and then file a claim against your bond. If is proven, you have to provide the necessary compensation.
In case you have more questions about obtaining your Illinois collection agency license and bonding, you can consult our specialists by calling us at 877.514.5146.
Latest posts by Victor J. Lance, President/Owner (see all)
- How to Obtain a Massachusetts Mortgage Broker License - October 16, 2019
- Your North Carolina Mortgage Broker License Guide - October 16, 2019
- How to Get a New Jersey Mortgage Broker License - October 15, 2019