DFPI issues second Debt Collection Licensing Act proposed rulemaking
On August 19, the California Department of Financial Protection and Innovation (DFPI) issued an invitation for comments on a proposed second rulemaking (NPRM) under the Debt Collection Licensing Act (the Act). As previously covered by InfoBytes, in 2020, California enacted the Act, which requires a person engaging in the business of debt collecting in the state, as defined by the Act, to be licensed and provides for the regulation and oversight of debt collectors by DFPI. Earlier in April, DFPI issued an NPRM to adopt new debt collector licensing requirements (covered by InfoBytes here). The most recent NPRM, among other things, seeks further input from stakeholders on topics related to:
- The scope of the Act as related to several definitions, including “debt,” “debt collection,” “person,” “consumer credit transaction,” “debt collector,” and “debt buyer,” to determine if additional clarity is necessary and whether these definitions are the same as those in California’s Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) and the Fair Debt Buying Practices Act (FDBPA).
- Whether certain terms related to definition of a debt collector, such as “engage in the business of debt collection,” “in the ordinary course of business,” or “regularly,” require clarifying regulations.
- Whether additional clarification is needed concerning entities or transactions exempt from the Act’s requirements.
- Whether the term “due or owing” is clear with respect to the definition of a “debtor.”
- Whether additional clarification is needed regarding DFPI’s authority to enforce the Rosenthal Act and the FDBPA. Under the Act, DFPI has the “authority to enforce the Rosenthal Act and the FDBPA against persons required to be licensed under the [Act] and persons expressly exempt from licensure, including certain federally regulated entities.”
The NPRM also addresses certain provisions related to annual reports and bond amounts. Comments on the most recent proposed rulemaking are due October 5, and may be sent electronically to firstname.lastname@example.org.