On September 11, 2014, the Arkansas Supreme Court ruled that out-of-state collection agencies were required to become licensed in Arkansas before they could attempt to collect debts in Arkansas. HSBC Bank Nevada, N.A. retained Cavalry SPV I, LLC to collect an account owed to it in Arkansas. Cavalry was not licensed in Arkansas as a collection agency. Cavalry retained local counsel in Arkansas in order to pursue collection of the account.

                The Court found that Cavalry was a debt collector under Arkansas law because it attempted to collect delinquent accounts which it purchased from other persons. The Court further found that statutory interpretation by the Arkansas State Board of Collection Agencies which exempted collection agencies such as Cavalry from the licensing requirement contradicted the clear, unambiguous language of the statute. As a result, Cavalry was required to be licensed in Arkansas. Because Cavalry was not licensed in Arkansas, it could not retain an Arkansas attorney to collect an Arkansas account.

                This holding means that creditors nationwide must now assign claims within Arkansas to Arkansas collection agencies or collect them directly through Arkansas counsel. Creditors who are not collection agencies are not required to be licensed and so they may retain local counsel. Collection agencies who attempt to collect debts in Arkansas without a license risk fines under the FDCPA. If you are a creditor outside of Arkansas who is owed money by somebody living in Arkansas, immediately contact Lance Owens of Owens, Mixon, Heller & Smith, P.A., TOLL FREE at 1-855-814-4018 or via email at lowens@omglawfirm.com, to determine what is required for your debt to be collected in Arkansas.