California Department of Financial Protection and Innovation Provides Update on California Consumer Financial Protection Law and Debt Collection Licensing Act Rulemaking

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On November 16, 2020, the California Department of Financial Protection and Innovation (DFPI) held a “listening session” relating to the implementation of the California Consumer Financial Protection Law (CCFPL). The DFPI’s intent of the session was to gather feedback on the CCFPL to help inform and prioritize its rulemaking and implementation efforts. Also during the session, the DFPI provided an update on its rulemaking and licensing efforts under the Debt Collection Licensing Act. The call was led by DFPI Commissioner Manuel Alvarez, who was recently appointed to President-elect Biden’s CFPB review team.

As we’ve noted before, the CCFPL provides the DFPI with broad rulemaking authority. During the call, the DFPI announced its rulemaking priorities under the law and indicated that its rulemaking will take place in distinct packages. The first two packages to be prioritized will relate to registration and enforcement. These final rules are expected to be issued by the end of 2021. Notwithstanding, the DFPI stated that classes of newly covered persons who are ultimately required to register should not anticipate being required to submit a registration before January 1, 2023. The DFPI stated that it anticipates issuing an invitation for comments in mid-2021.

The DFPI also provided guidance relating to the Debt Collection Licensing Act. The Department reiterated that debt collectors will be required to submit a license application before the end of 2021 to continue engaging in business in California as a debt collector in 2022. The DFPI anticipates that the application window for licensure will open late summer or fall 2021 and reiterated that licensed debt collectors should not need to separately register under the CCFPL.

The DFPI did not answer questions during the listening session.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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