Opinion No.

The Honorable Grady P. Arrington State Representative P.O. Box 65 Stephens, AR 71764

Dear Representative Arrington:

This is in response to your request for an opinion concerning the exact type of bond required by each licensee of a collection agency as authorized and required by the State Board of Collection Agencies.

The resolution of your question is governed by A.C.A. 17-21-306, which provides:

(a) The board shall require each licensee to secure a bond of five thousand dollars ($5,000) for its main office, plus an additional bond of one thousand five hundred dollars ($1,500) for each branch office, with the security on the bond to be approved by the board. It is the specific intent of this chapter to permit the posting of a surety bond, certificate of deposit, or cash bond.

(b) This bond shall provide that the person, partnership, association, or corporation giving the bond shall, upon written demand, pay and turn over to or for the person, partnership, association, or corporation from whom any account, bill, or other indebtedness is taken for collection in accordance with the terms of the agreement upon which it was received for collection.

(c) The aggregate liability of the surety for all breaches of the conditions of the bond shall, in no event, exceed the amount of the bond. The surety shall have a right to cancel such bond upon giving thirty (30) days' notice to the board and thereafter shall be relieved of liability for any breach of condition occurring after the effective date of the cancellation.

(d) This bond shall be made payable to the State Board of Collection Agencies.

This statutory section sets out in detail the exact type of bond required of licensees under the chapter. Please note that I have also enclosed rules and regulations issued by the State Board of Collection Agencies in this regard.

The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elana L. Cunningham.