On June 16, Nevada Governor Joe Lombardo signed into law Senate Bill 276, which significantly amended Nevada Revised Statute 649, otherwise known as the Nevada Collection Agencies Licensing Act (the Act). The Act regulates the activities of “collection agencies,” or any person “engaging, directly or indirectly, and as a primary or a secondary object business or pursuit, in the collection of or in soliciting or obtaining in any manner the payment of a claim owed or due or asserted to be owed or due to another.” Among other things, Senate Bill 276 expanded the exemptions from the collection agency licensing requirement to include entities that are not debt collectors under § 1692a(6)(A) – (F) of the Fair Debt Collection Practices Act (FDCPA). From a practical perspective, these expanded licensure exemptions should result in many first-party servicers no longer needing to obtain a Nevada collections license. Highlights of Senate Bill 276 include:

  • “Debt buyers” will now be required to have a collection agency license.
    • “Debt buyer” is defined as “a person who is regularly engaged in the business of purchasing claims that have been charged off for the purpose of collecting such claims, including, without limitation, by personally collecting claims, hiring a third party to collect claims or hiring an attorney to engage in litigation for the purpose of collecting claims.”
    • Mortgage servicers are exempt under this provision unless the “mortgage servicer is attempting to collect a claim that was assigned when the relevant loan was in default.”
  • The definition of “collection agency” has been amended to exclude:
    • Certain financial institutions and employees of such institutions;
    • Persons collecting claims that they originated on their own behalf; and
    • Other persons and entities deemed not to be debt collectors under federal law, including §1692a(6)(A)-(F) of the FDCPA.
  • Collection agencies are now expressly prohibited from:
    • Suing to collect a debt when they know or should have known that the applicable statute of limitations has expired.
      • The amendments specify that the applicable limitations period is not revived upon “payment made on a debt or certain other activity relating to the debt after the time period for filing an action based on a debt has expired.”
    • Selling an interest in a resolved claim.

The amendments take effect on October 1, 2023, but impacted debt buyers will have until January 1, 2024 to apply for a collection agency license.