California DFPI Shares Progress on Implementing Consumer Financial Protection Law

The state’s Consumer Financial Protection Law covers licensing and debt collection, and created a Debt Collection Advisory Committee that includes ACA International members.

03/29/2022 11:15 A.M.

4.5 minute read

A year after implementing one of the most expansive consumer protection laws in the U.S., California’s Department of Financial Protection and Innovation (DFPI) announced it has collected close to $1 million in restitution for consumers, fielded hundreds of additional complaints related to the law, and launched more than 100 investigations using its expanded authority under the California Consumer Financial Protection Law (CCFPL), according to a news release.

The DFPI also created several new divisions to expand oversight and outreach, including the Consumer Financial Protection Division, Office of Financial Technology Innovation, Office of the Ombuds, and a targeted outreach team responsible for working with historically underserved communities that include veterans, senior citizens, students and immigrants.

It also created a Debt Collection Advisory Committee which, among other responsibilities, provides critical feedback to DFPI on its debt collection licensing program. The committee will also advise the DFPI on matters related to the debt collection business, including proposed fee schedules and other requirements, ACA previously reported.

“The department has made substantial progress in its first year to implement the new law, expand protection for consumers, and foster responsible financial innovation,” said DFPI Commissioner Clothilde V. Hewlett. “We remain committed to accomplishing the goals of Governor Gavin Newsom and are grateful to all stakeholders, including the legislature, consumer advocates, industry partners, small businesses, community-based organizations, and many others for their continued input and support.”

Most provisions of the CCFPL went into effect on Jan. 1, 2021. The legislature passed the law in 2020 and it was signed by Gov. Newsom in September of that year.

Identifying gaps in consumer protection due to strict definitions in existing licensing laws, this new law provided the DFPI with the appropriate authority to oversee areas of the financial marketplace previously unregulated by the DFPI, including debt collectors, credit repair and debt relief companies, private postsecondary student loan products, and financial tech services that include early wage access products.


The department is now licensing debt collectors.

The Debt Collection Licensing Act, which took effect Jan. 1, 2022, requires any person engaging in the business of debt collection in California to be licensed annually by the DFPI.

The DFPI is expecting to license thousands of entities over the next two years, according to the news release. To avoid missing important updates, interested parties are encouraged to check the DFPI website periodically and subscribe to the DFPI’s email subscription service.

The first license applications were due Dec. 31, 2021, to operate in California. Before the end of the year, the DFPI received approximately 600 applications, which allowed companies to operate while the approval process played out.

Melinda Lee, deputy commissioner, debt collector licensing with the DFPI, said last year the department expected the approval process to continue through 2022 and possibly 2023.

ACA International’s licensing team has resources to help members navigate the licensing process.

Visit ACA’s licensing website, email [email protected] or call (952) 926-6547.

CCFPL Report Takeaways

Here are some additional takeaways from the DFPI’s annual report.


  • During its first year with authority under the CCFPL, the DFPI proactively identified enforcement targets and opened 106 investigations that resulted in 49 public actions under the CCFPL.
  • The DFPI investigations resulted in 49 public enforcement actions, $975,000 in restitution to consumers, $547,500 in penalties, and included several “first of its kind” actions for the DFPI in debt collection, student debt relief, earned wage access, and private post-secondary education financing.

Regulatory Activities

  • In 2021, the DFPI issued four invitations for comments to solicit stakeholder feedback on various aspects of implementation of the CCFPL. The DFPI received 76 comment letters.
  • As of the end of 2021, the DFPI had three pending regulation packages pursuant to the CCFPL: 1) complaint procedures, 2) commercial financing UDAAP, and 3) phase one registration categories.
  • Proposed registration includes debt settlement services, student debt relief services, postsecondary education financing and wage-based advances.

Research and Market Monitoring

  • In September 2021, the DFPI created a research team to help it identify emerging financial activities; scout for unlawful, unfair, deceptive, and abusive practices; and make policy recommendations based on consumer impact.
  • The research team is evaluating the DFPI’s consumer complaint data to identify broader market trends that may pose risks to consumers.

Consumer Complaint Handling

  • In 2021, the Consumer Services Office received 638 complaints regarding products and services subject to the CCFPL.
  • Complaints submitted under the new law, which covered debt collection activities in the first year, increased each quarter with a dramatic surge in the second half of the year when CCFPL complaints increased nearly 140 percent.
  • The top categories of complaints included debt collection, cryptocurrency, and “neo banks,” financial technology or “fintech” service providers, partnering with banks to offer deposit account services. The top complaints appear to have been driven by communications efforts to raise awareness about the DFPI’s expanded authority and mission.

Office of Financial Technology and Innovation

  • In 2021, the Office of Financial Technology and Innovation (OFTI) met with dozens of companies, venture capitalists, lawyers, industry advocacy groups, federal and state financial regulators, consumer advocacy groups, and academics to better understand stakeholder perspectives on what constitutes responsible innovation in financial services.
  • OFTI participated in more than a dozen public events to publicize OFTI’s activities and extend the invitation to meet, as well as holding weekly office hours.

For more information about the DFPI, visit their website at

If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.

If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.


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