Collector agencies - Banking law

Collector agencies

The current United States legislation does not contain special rules that establish the legal status of collection agencies and determine the specifics of their activities in the banking sector of the economy. The form of the collection agency has been introduced into United States practice from Western law and order, in particular from the US banking sector, where since 1978 the Law on Fair Practice of Debt Collection has been in force. The first collection agencies on the territory of the United States were created as subsidiaries of banks and were intended solely to work on the return of debts to the parent banks. At present, professional activities to collect debts form their own segment of entrepreneurship, in which there are more than a thousand specializing in this area of ​​commercial organizations.

As a rule, collection agencies are created and participate in civil turnover in the organizational and legal form of business entities. They are endowed with the general legal capacity inherent in most commercial legal entities. The activities of collection agencies are not licensed, and the services they provide are not subject to certification. Obviously, collection agencies on the status can not replace the bank, acting as a new lender, in relations with the borrower. In their professional activities, collection agencies are guided first and foremost by the rules on assignment of a claim (Article 382-390 of the Civil Code of the United States) and agency service (Article 1005-1011 of the Civil Code of the United States).

In the first case, the bank sells the right to collect debt under the loan agreement to the collection agency, while retaining the remaining rights and obligations of the contract. Such actions of the bank are within the scope of the current legislation, since the latter does not contain a ban on the assignment of the right to claim under a loan agreement of an organization that is not a credit.

In the second case, the collection agency commissioned by the bank for remuneration, performs actions to recover debts from the borrower. Depending on the terms of the agency agreement, the collection agency may act on its own behalf, but at the bank's expense either on behalf of and at the bank's expense. The current legislation will be observed in this case, too, since it does not contain any restrictions on the type and nature of the actions performed by the agent. At the same time, the agency's actions can be of a continuing, repetitive nature.

Absence of complex legal regulation of relations in the field of collection agencies creates a number of negative phenomena, one of which is the inconsistency of judicial practice in cases related to the protection of consumer rights in the financial services market. Arbitration courts, as a rule, recognize the legal assignment of the right of claim to collection agencies, and the courts of general jurisdiction hold the position that the cession of the claims of a bank to a third party, unequal to it, but the scope of rights and obligations to the entity, within the licensed type of activity can take place only with the consent debtor. There is no uniform approach among law enforcement agencies and the resolution of the problem related to the preservation of bank secrecy, which inevitably, in our opinion, is violated by the assignment of the bank's claims to the collection agency.

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