Bill Introduced in California to License Collectors, Debt Buyers

California state Senator Bob Wieckowski has introduced a bill that would require collection agencies in The Golden State to be licensed, adding another state to the list of those seeking to mandate such a measure.

Sen. Wieckowski, who previously sponsored a measure that capped how much collectors could seize from an individual’s bank account following a judgment, seeks to restart the licensing process for debt collectors and debt buyers in California.

“California licenses everyone from mattress renovators to barbers and cosmetologists, yet debt collectors, who can wreak havoc on a consumer’s finances, are not licensed,” said Sen. Wieckowski, a member of the Senate Judiciary Committee, in a statement.. “This glaring lack of oversight in the nation’s most populous state needs to end. This industry consistently violates consumer law and generated more than 400,500 consumer complaints between 2011 and 2018. We need a robust licensing requirement to enforce our laws and protect consumers.”

California would join New York in adding a licensing requirement for debt collectors. New York Governor Andrew Cuomo announced last month his interest in passing a law that would require debt collectors to be licensed as well.

If enacted, SB 908 would require collectors to reference their license number in every phone conversation with consumers. As well, all written and digital communications would require the collectors’ license numbers. The Commissioner on Business Oversight would have authority over the licensing process and would be able to consider the personal history and credit reports of those seeking licenses. The fee to obtain a license would be $100 for investigating the application and obtaining fingerprints, and a $300 application fee. Along with filling out a license application, the collector would be required to include a sample of all documents it will use in correspondence with California consumers.

Sen. Wieckowski noted that California previously required a license for collectors to operate, but that expired in 1992 and was never renewed. He noted that “licensing is common in two-thirds of the nation.”

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