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Collection Agency — CA
Total cost: $1,200
Some details on this page are not yet confirmed against an official source. See sources below or contact the licensing board to verify.
Required
State License
License
License Type
$20,000
Surety Bond
$100
Application Fee
Required
Trust Account
$1,200
Total Initial Fees
Annual premium: $400-$2000 (typically 2-10% of bond face value based on credit)
Bond Required
Yes
Bond Amount
$20,000
Annual Premium
$400-$2000
E&O Insurance
Recommended but not required by most states. E&O insurance protects against claims of negligence or failure to perform professional duties.
General Liability
Recommended minimum $1,000,000 general liability coverage for business protection.
Minnesota requires a $20,000 surety bond to protect consumers from potential damages caused by collection agency misconduct.
Form a business entity (LLC or corporation recommended) in Minnesota. Obtain an EIN from the IRS and register with the Minnesota Secretary of State. This establishes the legal foundation for your collection agency.
All collection agencies must comply with the Fair Debt Collection Practices Act (FDCPA) and CFPB Regulation F. These federal laws govern communication frequency, required disclosures, and prohibited practices when collecting debts.
Obtain the required surety bond of $20,000 from a licensed surety company. Annual premium: $400-$2000 (based on credit score and financial history). Minnesota requires a $20,000 surety bond to protect consumers from potential damages caused by collection agency misconduct.
Apply for your Minnesota collection agency license through the Minnesota Department of Commerce. Collection agencies must be licensed and individual debt collectors/solicitors must be registered under Minn. Stat. § 332.33. Application fee: $100. License fee: $100.
Minnesota requires individual debt collectors to be registered in addition to the agency license. Ensure all employees who communicate with debtors are properly registered.
Establish a separate trust account for funds collected on behalf of creditors as required by Minnesota law. Minnesota requires collection agencies to maintain a separate trust account for funds collected on behalf of creditors. Collected funds must be deposited within a specified timeframe and remitted to creditors according to contractual terms.
Minnesota requires you to maintain a minimum net worth of $25,000.
Implement compliant collection procedures including required debtor disclosures and communication logging. Minnesota requires records to be maintained for 3 years. Be aware of 5 state-specific prohibited practices.
Renew your license annual. Renewal fee: $100. Late renewal penalty: Late renewal may result in additional fees, license suspension, or requirement to reapply as a new applicant..
Total Initial Licensing Fees
$1,200
Includes application, license,
and first-year bond premium
Application Fee
$100
Initial application fee for Minnesota collection agency license
License Fee
$100
Annual license fee
Surety Bond Premium
$400-$2000
Estimated annual premium (2-10% of bond face value, varies by credit)
Renewal Fee
$100
Annual renewal fee
Costs above are licensing-related fees only. Additional startup costs such as software, office space, staff, and insurance are not included.
All collection agencies must comply with these federal requirements regardless of state
VerifiedFDCPA (Fair Debt Collection Practices Act)
Applies
The Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) prohibits abusive, deceptive, and unfair debt collection practices. Applies to third-party debt collectors collecting consumer debts.
CFPB Regulation F
Applies
CFPB Regulation F (12 CFR Part 1006), effective November 30, 2021, implements the FDCPA and governs communication practices including call frequency limits (7 calls per debt per 7-day period), electronic communication rules, and validation notice requirements.
FTC Oversight
Yes
The Federal Trade Commission enforces the FDCPA and takes action against debt collectors engaged in unfair or deceptive practices.
The Fair Debt Collection Practices Act (FDCPA) and CFPB Regulation F apply to all third-party debt collectors nationwide. The FDCPA prohibits abusive, deceptive, and unfair collection practices. Regulation F (effective November 30, 2021) establishes specific rules for communication frequency, electronic communications, and debt validation notices. The FTC and CFPB jointly enforce these requirements.
Not sure if you need a collection agency license? Check whether your state requires one.
State-specific licensing and registration requirements
Mostly verifiedState License
Required
VerifiedLicense Type
License
VerifiedIndividual Collector Registration
Required
Mostly verifiedMinimum Net Worth Requirement
$25,000
License Details
Collection agencies must be licensed and individual debt collectors/solicitors must be registered under Minn. Stat. § 332.33.
Collection agency licensing varies significantly by state. Most states require agencies to obtain a license or registration, post a surety bond, and maintain separate trust accounts. Some states also require individual debt collectors to be separately registered. Requirements may differ for in-state vs. out-of-state collection agencies.
Surety Bond & Insurance Coverage
Mostly verifiedSurety Bond Required
Yes
Bond Amount
$20,000
E&O Insurance
Recommended but not required by most states. E&O insurance protects against claims of negligence or failure to perform professional duties.
General Liability
Recommended minimum $1,000,000 general liability coverage for business protection.
Bond Details
Minnesota requires a $20,000 surety bond to protect consumers from potential damages caused by collection agency misconduct.
Surety bond requirements for collection agencies vary widely by state, ranging from $5,000 to $300,000. The bond protects consumers from potential damages caused by collection agency misconduct. Annual bond premiums typically range from 2-10% of the bond face value, depending on the applicant's credit score and financial history.
| Fee | Amount |
|---|---|
Application Fee Initial application fee for Minnesota collection agency license | $100 |
License Fee Annual license fee | $100 |
Renewal Fee Annual renewal fee | $100 |
Surety Bond Annual Premium Estimated annual premium (2-10% of bond face value, varies by credit) | $400-$2000 |
Total Initial Fees Includes application fee, license fee, and estimated surety bond premium | $1,200 |
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Renewal Requirements & Ongoing Obligations
Mostly verifiedAnnual
Renewal Period
Not Required
Continuing Education
$100
Renewal Fee
Late Renewal Penalty
Late renewal may result in additional fees, license suspension, or requirement to reapply as a new applicant.
Continuing Education Details
Most states do not require continuing education for collection agencies. However, staying current on FDCPA amendments, CFPB guidance, and state regulatory changes is strongly recommended.
Regulatory Board
Most states require annual renewal of collection agency licenses. Failure to renew on time may result in late fees, license suspension, or the need to reapply as a new applicant. The surety bond must also be maintained continuously. While most states do not require formal continuing education, staying current on FDCPA amendments, CFPB guidance, and state law changes is essential.
Trust Accounts, Record Keeping & Prohibited Practices
Mostly verifiedTrust Account
Required
Minnesota requires collection agencies to maintain a separate trust account for funds collected on behalf of creditors. Collected funds must be deposited within a specified timeframe and remitted to creditors according to contractual terms.
Record Keeping
3 years minimum
Records of all collection activities, correspondence, and financial transactions must be maintained.
Prohibited Practices
Required Disclosures
Collection agencies must maintain strict compliance with both federal and state regulations. Trust accounts protect consumer funds from commingling with agency operating accounts. Record keeping requirements ensure accountability and facilitate regulatory examinations. Violations of prohibited practices can result in license revocation, fines, and civil liability.
Minnesota requires both agency licensing and individual collector registration. The state mandates a $25,000 minimum net worth and $20,000 surety bond.
All collection agencies must comply with the federal Fair Debt Collection Practices Act (FDCPA) regardless of state licensing status.
CFPB Regulation F (effective November 30, 2021) limits collection calls to 7 per debt per 7-day period and establishes rules for electronic communications.
Minnesota requires collection agencies to obtain a state license before conducting collection activities.
A $20,000 surety bond is required in Minnesota.
Minnesota requires collection agencies to maintain separate trust accounts for funds collected on behalf of creditors.
Minnesota requires individual debt collectors/solicitors to be separately registered or licensed.
Records must be maintained for at least 3 years in Minnesota.
Collection Agency requirements in nearby states
| State | Total Cost | Timeline | |
|---|---|---|---|
| Minnesota (you) | $600-$2,200 | 4–12 wks | |
| Iowa | $450-$1,650 | 4–12 wks | → |
| North Dakota | $400-$800 | 4–12 wks | → |
| South Dakota | $500-$1,700 | 4–12 wks | → |
| Wisconsin | $1,200-$2,800 | 4–12 wks | → |
See how Minnesota compares: Collection Agency License Fees by State — Cheapest to Most Expensive →
Compare collection agency requirements across all states →
Collection Agency licensing requirements nationwide →
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How does Minnesota compare to other states for collection agency? See the full comparison →
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Collection Agency Schools in Minnesota
Compare approved training programs, costs, and requirements.
Training materials for FDCPA compliance and collection agency licensing.
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Collection Agency requirements in Minnesota verified against Minnesota Department of Commerce, March 2026.
Accessed 2025-01-15
Accessed 2025-01-15
Accessed 2025-01-15
Moving to Minnesota? Use our free Transfer Tool to see what you need →
Already licensed elsewhere? See how to transfer your Collection Agency license to Minnesota →
Transfer your Collection Agency license from Minnesota to: Iowa → | North Dakota → | South Dakota → | Wisconsin →
Minnesota requires a state license for collection agencies. A $20,000 surety bond is required. All collection agencies must comply with the federal FDCPA and CFPB Regulation F. State licensing is managed through the Minnesota Department of Commerce.
Requirements vary by state. Always verify current requirements with your state licensing authority and review CFPB guidance.