The California Department of Financial Protection and Innovation (DFPI) has issued a notice of rulemaking, seeking to incorporate changes to its debt collection license application after reviewing comments on the proposal. Interested parties have until July 12 to submit their comments on the new proposal.
The licensing law is scheduled to go into effect on Jan. 1, 2022. The proposed rules, if adopted, are expected to go into effect on November 19 of this year. Under the proposal, collectors would be able to apply for a license via the Nationwide Multistate Licensing System (NMLS). The application will have to include the applicant’s principal place of business, as well as all branch locations. Applicants will also have to carry a surety bond of $25,000.
Among the changes being proposed by the DFPI are:
- Changing how an “affiliate” and “applicant” are defined under the rule
- Removing the definition of “policies and procedures”
- Adding a section related to submitting documents in English or providing a translation if submitting a document in a different language
- Requiring certain forms to be submitted through the NMLS rather than be sent directly to the DFPI
- No longer requiring the submission or a passport for direct owners, executive officers, and indirect owners
- No longer requiring disclosure of the use of third parties to perform debt collection functions
- No longer requiring the submission of copies of all policies and procedures
- No longer requiring the submission of the total dollar amount of debt collected from consumers to determine whether a higher surety bond is required
- No longer requiring a higher surety bond