Nearly every organization is forced to deal with the unexpected departure of a member of their management team. While it does create somewhat of a fire drill, someone else can typically be ready to step in on short notice and take over the vacated position with little or no negative impact on the organization’s daily activities.

Unfortunately, changes like these are not as easily remedied in an industry as regulated as the ARM industry. Many agencies suddenly find themselves out of compliance by not understanding the impact that the sudden departure of a senior level employee may have on their debt collection licenses. Here is one example.

What if the person who is no longer with your organization is listed as your agency’s collection manager with the various state licensing departments?

In some states, the process of replacing a collection manager is as simple as notifying the appropriate state department of the change within a specified period of time. Please note that in most instances, if the state is not notified in a timely manner, your debt collection license will be immediately revoked. Any subsequent collection activity would then be unlicensed and subject to administrative, civil and/or criminal penalties. But in other states, the change is not that simple. Michigan and Nevada, for example, each require collection managers to take an exam.


In order to hold a debt collection license in the state of Michigan your organization must have a licensed collection manager that among other things has passed the Michigan collection manager exam. Should you unexpectedly lose your licensed collection manager, the state of Michigan provides 30 days to appoint a replacement manager, file the required manager application, and schedule the examination date. Failure to do these will result in the suspension of your agency’s license.

It should be noted that it is likely the agency will be permitted to continue operations under the direct supervision of the agency owner until the results of the exam are issued. But if the applicant fails the exam, your agency’s license will be immediately suspended.


Nevada Revised Statutes 649.305 states that “no collection agency may operate its business without a manager who holds a valid manager’s certificate…” If your licensed collection manager unexpectedly leaves today, collection in Nevada must cease and cannot resume until your organization has an individual who holds a valid Nevada manager’s certificate. The state only offers the examination a few times per year, so it is imperative to be prepared in the event of your licensed collection manager’s departure.

We always recommend that you have a fully qualified and licensed back-up manager in place (employed) in the event your agency finds itself without the service of your currently licensed collection manager. The importance of licensing and putting into place a back up collections manager for your agency cannot be overstated.


Christy Young Barger is the Director of Client Relations for Cornerstone Support.  After 10 years experience she has a thorough knowledge of the entire licensing process. If  you are an attorney or law firm that needs to be licensed in New York City contact us for a quote today at (888) 445-8660 or

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