Supervision of Foreign Entities NACARA October 12, 2016 Elizabeth Benotti, Chief Director, Massachusetts Division of Banks Erin Berger, Regional Field Manager, Consumer Financial Protection Bureau Brian Ellis, Attorney at Law, The Ellis Law Firm, LLC

Agenda Introduction Overview Legal Licensing Examination Questions/Wrap-up Contact Information

Legislative Background Fair Debt Collection Practices Act (FDCPA) 15 U.S.C. §§ 1601, 1692-1692p. The “Floor” No federal collection agency/debt collector licensing requirements U.S. States/Municipalities Additional regulation through licensing, registration and/or bonding

The Debt Collector An Unpopular, but Necessary Actor Why Foreign Entities as Debt Collectors?

PRE-APPLICATION CONSIDERATIONS

PREPARATION OF APPLICATION Notarization Apostille - An "apostille" is a form of authentication issued to documents for use in countries that participate in the Hague Convention of 1961. Timeliness Participation U.S. Embassy Notarization Similarity of Form and Function 22 C.F.R. § 92.2. Acceptability New Jersey Surety Bond Registration

CULTURAL ISSUES WITH FOREIGN ENTITIES Credit Reports The Lessons of CIBIL Proving Financial Responsibility Cash-Based vs. Credit-Based Economies Sharing to Resolve a Common Problem U.S. Social Security Numbers NMLS Unique Identifier Number Republic of India - PAN

FINDING SOLUTIONS Theme of Presentation – Cooperation Finding Solutions as New Issues Arise Fingerprinting via NMLS Electronic Surety Bonds

State Licensing of Foreign Entities Submitting Application NMLS Requirements (M.G.L. Chapter 93 Section 24 209 CMR 18.00) Financials Statements (must be positive) Business Plan Control Persons Electronic Surety Bonds (new) CBC (new) Review Process IRTTC Approval Process Management Approval

Renewals NMLS Financials CBC (FBI Fingerprints) Automated Renewals Financials Positive Net worth Memorandum of Understanding CBC (FBI Fingerprints) Required for all renewals Electronic Surety Bonds

Massachusetts Debt Collector Entities Companies – 409 25 international companies (6%) Branches – 317 32 international branches (10%) Countries India Philippines Mexico Jamaica Guatemala Panama

Examination of Foreign Entities Approach for Regulators to Monitor and Examine Due Diligence of the Institution – Branch vs. Vendor Review Location International Logistics

Wrap-up

Contact Information Elizabeth (Liz) Benotti Elizabeth.Benotti@state.ma.us 617-956-1541 Erin Berger (202) 384-4192 Brian Ellis www.ellislaw-kc.com 816-472-1515