On August 19, 2021, the California Department of Financial Protection and Innovation issued a request for comments as it considers a second rulemaking related to the Debt Collection Licensing Act. The first rulemaking, issued earlier this year relates to the license application process and requirements for debt collectors who may begin to apply for a debt collection license starting in September 2021.
The DFPI’s August 19 request for comments includes topics on the scope of the DCLA, including whether terms from the DLCA such as “debt”, “debt collection”, “consumer credit transaction”, “debt collector,” “engag[ing] in the business of debt collection”, “in the ordinary course of business” or “regularly” are unclear, and whether the DFPI needs to further clarify exemptions and who are exempt from licensure. While it is no guarantee the DFPI will issue a second rulemaking covering these topics, the request for comments appears to be a recognition by the DFPI that there are unanswered questions about who is required to obtain a license. Many of the previous comments submitted in response to the first rulemaking by the DFPI included such questions about the scope of the DFPI. Moreover, we have previously written about industry questions and concerns over the coverage of the DCLA.
In addition to the topics about the scope of the DCLA, the request for comments includes topics on annual reports due from licensees, and whether the DFPI should require higher bond amounts and what amounts.
Comments to the second rulemaking are due by October 5, 2021.