DFPI Second Proposal for Debt Collections Licensing Regulations – Financial Services

To print this article, all you need to do is be registered or log in to Mondaq.com.

On July 15, California’s DFPI released draft text for a second regulatory proposal under the Debt Collection Licensing Act (DCLA) regarding the scope, annual report, and provisions for increasing the amount of debt collection obligations. DCLA.

Here are some examples of the proposed changes:

  • a new definition of “engaging in debt collection activity” which expressly includes advertising or offering another debt collection service;

  • an exclusion that employees of debt collectors are not required to be licensed if acting in the course of their employment with a California licensed debt collector;

  • the conditions under which a creditor, in his own name, requesting the reimbursement of a consumer debt resulting from a credit granted by the creditor could be considered to be carrying on a debt collection activity for the purpose of obtaining a license in California ;

  • disclosure requirements for annual reports; and

  • record-keeping requirements, including the requirement to keep records of any contact or attempted contact with anyone associated with a debtor account, regardless of who initiated the contact and whether the attempt was successful .

The DFPI Commissioner invites interested parties to submit their comments on the proposed regulations, which must be submitted no later than Monday, August 29, 2022.

Put into practice : These proposed changes appear to be part of the California regulator’s broader effort to combat illegal and deceptive acts and practices in debt collection. According to a consumer alert published on July 21, the DFPI has recently seen an increase in complaints involving bogus debt collectors attempting to collect false debts. The DFPI also recently issued three enforcement actions against several debt collectors for illegal and deceptive debt collection activities (see complaints here, here and here). Given the recent regulatory focus on debt collection, companies engaged in debt collection must ensure that their business practices comply with California law.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR ARTICLES ON: Finance and Banking of the United States

Have I waived the terms of my contract?

McGlinchey Stafford

In that appeal, the Sixth Circuit Court of Appeals reversed and returned the decision of the District Court for the Northern District of Ohio, finding that the debt collector violated the Fair Debt Collection Practices Act. .

CFPB targets convenience fees

Cooley LLP

On June 29, 2022, the Consumer Financial Protection Bureau issued an advisory opinion stating that the Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors…

A constitutional hold?

Mayer Brown

Pay particular attention to New Jersey’s Bill A793, the Community Wealth Preservation Act, which the New Jersey Legislature passed in late June and sent to the governor for consideration.

.

Leave a Comment