Collection licenses are required from January 1, 2022. However, a debt collection licensee who applies for a license before this date can continue working while the application is pending. In his Notice of the creation of rulesDFPI expects the final rules to come into effect on or around November 19, 2021, so debt collection agencies can apply for a license before January 1, 2022.
In particular, DFPI suggests adding the following sections to sub-chapter 11.3 of Title 10 of the California Code of Regulations, which set out the requirements for obtaining a debt collection license under the DCLA:
- Section 1850 – Defines the terms used in the regulations.
- Section 1850.6 – Requires electronic filing of license application and related information through the Nationwide Multistate Licensing System (NMLS).
- Section 1850.7 – Contains the license application and information requirements.
- Section 1850.8 – Requires the designation of the agent as the process service agent.
- Section 1850.9 – Requires California Department of Justice fingerprints.
- Section 1850.10 – Requires an Investigation Report for Non-US Residents
- Section 1850.11 – Provides guidance on information practices and privacy.
- Section 1850.12 – Describes the process for challenging information in NMLS.
- Section 1850.13 – Allows for information to be exchanged with other government agencies.
- Section 1850.14 – Clarifies “financial responsibility” for denying a license.
- Section 1850.15 – Establishes denial of license.
- Section 1850.16 – Requires a specific email address to receive communications from the department.
- Section 1850.30 – Provides a method for reporting changes to information in the license application.
- Section 1850.31 – Provides a procedure for reporting new officers, directors, and other key personnel.
- Section 1850.32 – Provides a method of registering a new branch or changing an existing branch.
- Section 1850.50 – Requires a $ 25,000 minimum bond and specifies the form of bond.
- Section 1850.60 – Provided the license is valid until revoked, suspended, or surrendered.
- Section 1850.61 – Provides a method of obtaining the license.
The 45-day deadline for public comments on the proposal ends June 8, 2021. Comments can be emailed to [email protected] or by mail to the Department of Finance and Innovation, Attn: Sandra Sandoval, 300 S. Spring Street, Suite 15513, Los Angeles, California 90013.
We know that many in the industry have a number of questions about whether or not they need a license, how can existing licenses avoid (or not) the need for a license, the scope of the exemptions, and a host of other topics. This is an important opportunity to ask these questions and advocate for the result you want. Our company is already working with DFPI on a number of matters and is ready to assist with submitting comments.