The proposed regulations for Debt Collection Licensing Act will be installed in Title 10, California Code of Regulations, Subchapter 11.3 “Debt Collection Licensing Act.” A copy of the proposed rulemaking text is here.
The proposed rulemaking would adopt the license application forms, requirements to obtain a license as a debt collector, and other requirements related to licensure such as surety bonds, copies of debt collection documents to be sent to consumers, pre-licensure reporting of debt collection activity in California, and the inclusion of any Affiliates that also engage in California debt collection to be listed under a single enterprise license. The proposed regulations require applicants to apply for and maintain their debt collection license through the Nationwide Multistate Licensing System & Registry (NMLS) by using application forms MU1 for the person and its affiliates to be listed in a single enterprise license, MU2 background check information for individual “control persons,” and MU3 identifying branch office locations and their respective branch managers.
The proposed regulations also cover these licensing issues:
- Final rulemaking in advance of SB 908’s January 1, 2022 operative date. Consistent with the new Financial Code Section 100000.5, the proposed regulations would adopt the license application and procedures to allow debt collectors to apply for a license in advance of SB 908’s January 1, 2022 operative date. DFPI is targeting final rulemaking to take effect by November 19, 2021.
- Provides a list of what information is required from MU1 and MU2 applicants in order for the DFPI to investigate whether they meet the standards for licensure.
- Provides the processes to challenge information entered by the DFPI representatives in the NMLS, to submit and maintain a surety bond ($25,000 is the minimum required by statute), and to change information in the license application including changes in key personnel, branch offices, and ownership over a 10% threshold.
- Specifies the acts that may constitute grounds for the DFPI to deny a debt collection license.
The comment period for DFPI proposed rules ends June 8, 2021. To read more click here