CA-DFPI INVITES COMMENTS ON DEBT COLLECTION REQUIREMENTS

CA-DFPI INVITES COMMENTS ON DEBT COLLECTION REQUIREMENTS

The California Department of Financial Protection (“DFPI”) and Innovation has released a draft text of new rulemaking regarding the scope, reporting and record retention requirements of the Debt Collection Licensing Act (“DCLA”). The proposed rulemaking would exempt from licensure: (i) original creditors who meet certain criteria; (ii) servicers of current debts on behalf of original creditors; (iii) certain healthcare providers, healthcare facilities and hospitals; (iv) student loan servicers; (v) employees of DCLA-licensed debt collectors; (vi) government entities; and (vii) certain public utilities.

The most notable change is the proposed exemption for “original creditors.” Under the proposed rulemaking, a creditor seeking, in its own name, repayment of consumer debt arising from credit, which the creditor extended, is not engaged in the business of debt collection unless. Read More