SUMMARY OF BILL
REPORTED FROM COMMITTEE
The bill would amend Article 9 of the Occupational Code, which governs collection agencies and provides for their licensure, to revise restrictions pertaining to collection agencies' employment of attorneys to collect claims.
Article 9 prohibits a licensee from employing or retaining an attorney to collect a claim. A licensee may employ the service of an attorney on behalf of a creditor if authorized to do so in writing and the licensee's conduct is at all times consistent with a true attorney-client relationship between the attorney and the creditor. Under the bill, a licensee would be prohibited from retaining (but not employing) an attorney to collect a claim.
Also, a licensee is prohibited from sharing the compensation for service performed by an attorney in collecting a claim or demand. The bill specifies that this would not apply to a licensee that employed an attorney, or to an attorney who was employed by a licensee, to engage in the collection of claims.
In addition, Article 9 prohibits a licensee from listing the name of an attorney in a written or oral communication, collection letter, or publication. The bill would prohibit a licensee from doing so, unless the attorney was an employee of the licensee and was engaged in collecting a claim.
A licensee also is prohibited from engaging in the practice of law or instituting a judicial proceeding on behalf of another. Under the bill, this provision would not apply to an attorney who was an employee of the licensee.
Additionally, Article 9 prohibits a licensee from sharing quarters or office space, or having a common waiting room with a practicing attorney or a lender. The bill, instead, would prohibit a licensee from doing so with a lender or a practicing attorney who was not an employee of the licensee.
The bill would have no fiscal impact on State or local government.
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.