California DFPI Extends Comments on Debt Collection Licensing

California DFPIThe comments sought by the California Department of Financial Protection and Innovation (DFPI) focus on draft text related to the scope of the licensing requirement for employees of debt collectors as well as annual report and document retention requirements for licensees. The comment deadline is now Aug. 29 after the DFPI issued a clarification on text in the draft text.

07/18/2022 11:30 A.M.

3 minute read

The California Department of Financial Protection and Innovation (DFPI) is seeking comments on new draft text of the Debt Collection Licensing Act (DCLA) that took effect in January this year.

The draft text is related to the scope, annual report, and document retention requirements of the DCLA.

The DCLA requires any person engaging in the business of debt collection in California to be licensed annually by the DFPI.

In the draft text, the DFPI expands on the scope of the licensing requirement for employees of debt collectors and criteria that would qualify original creditors as engaging in the business of debt collection.

The DFPI also outlines annual report and document retention requirements for licensees.

The corrected draft text clarifies that neither residential rental debt nor debt owed to a Homeowners’ Association, as specified, constitutes consumer debt under the DCLA.  Comments, including feedback describing the potential financial impact of the draft regulations, are due by Monday, Aug. 29.

How to submit comments:

  • Comments may be submitted electronically to [email protected]. Include “PRO 05-21” in the subject line.
  • Comments may be submitted by mail to:
    Department of Financial Protection and Innovation Legal Division
    Attn: Sandra Navarro, Legal Assistant
    2101 Arena Blvd. Sacramento, CA 95834

Questions regarding the invitation for comments may be directed to DFPI Senior Counsel Emily Gallagher at [email protected].

Debt Collection Advisory Committee Meeting

The California Debt Collection Advisory Committee, established under the DCLA and including several members of ACA International, also recently met on July 27.

In April 2021, the DFPI announced the creation of the debt collection advisory committee, a seven-member board that provides critical feedback to the department as it starts up its debt collection licensing program.

The committee advises DFPI Commissioner Clothilde V. Hewlett on matters related to the debt collection business, including proposed fee schedules and other requirements.

The committee members are serving two-year terms and represent a diverse cross-section of stakeholders. Five are industry representatives, one is a consumer advocate, and one is a law and economics professor who studies the industry.

ACA members on the committee include Scott Hyman, attorney with Severson & Werson PC; Mark Naiman, president of Absolute Resolutions Corp.; Cindy Yaklin, president of States Recovery Systems Inc. and the California Association of Collectors Inc.; Tamar Yudenfreund, senior director, public policy at Encore Capital Group and chair of ACA’s federal affairs committee; and Ohad Samet, president of TrueAccord Corp.

Additional committee members include Elizabeth Gonzalez, directing attorney with the Consumer Law Unit at the Public Law Center, and Prasad Krishnamurthy, professor of law at the University of California Berkeley School of Law.

The committee’s first meeting last July focused on technology in the debt collection process, licensing, DFPI research on consumer communications and making sure the department understands the processes used for agencies collecting consumer debt, ACA previously reported.

DFPI Senior Deputy Commissioner Suzanne Martindale and Deputy Commissioner Melinda Lee will led the virtual meeting July 27.

The agenda included a program update, regulations (outside of pending current regulations), a roundtable discussion and public comment. ACA will provide an update on the meeting in ACA Daily.

For more information on how the ACA licensing staff can assist with your licensing application completion needs, please contact us at [email protected] or call (952) 926-6547.

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