DFPI Issues Draft Rules to License Four New Types of Industries, Including Debt Settlement Providers

The California Department of Financial Protection & Innovation is seeking comments on a proposed rulemaking that would require four different industries to be registered with the state in order to operate — debt settlement services, student debt relief services, education financing, and wage-based advances.

Comments on the proposed rulemaking are due by December 20 and can be either submitted electronically or via traditional mail. Electronic submissions should be emailed to regulations@dfpi.ca.gov with the subject line, “PRO 01-21.”

The DFPI said the proposed rulemaking, if enacted, will “strengthen its ability to protect California consumers through compliance examinations of registrants and regular reporting.”

Debt collectors will need to be licensed to collect in California starting on January 1, 2022. Applications that are submitted on or before December 31 will be allowed to continue collecting while the application is being processed.

Along with seeking general comments about the draft rules, the DFPI is also looking for feedback on the proposed economic impact on businesses and consumers should the rules be enacted. Among the questions that the DFPI is seeking answers to are:

  1. Explain the impact of the draft rules on the ability of California businesses to compete
    with businesses in other states.
  2. Explain the economic impact of the draft rules.
  3. Explain whether and to what extent the draft rules would create or eliminate jobs
    within the state.
  4. Explain whether and to what extent the draft rules would create new businesses or
    eliminate existing businesses within the state.
  5. Explain whether and to what extent the draft rules would affect the competitive
    advantages or disadvantages for businesses currently doing business within the state.
  6. Explain whether and to what extent the draft rules would affect the expansion of
    businesses currently doing business within the state.
  7. Explain whether and to what extent the draft rules would increase or decrease
    investment in the state.
  8. Explain whether and to what extent the draft rules would affect the incentives for
    innovation in products, materials, or processes.
  9. Explain whether and to what extent the draft rules would benefit the health, safety,
    and welfare of California residents, worker safety, and the state’s environment and
    quality of life, among any other benefits.
  10. Explain whether there is a more cost-effective way that is equally effective in
    achieving the purpose of the draft rules.
  11. Describe any reasonable alternatives to the draft rules that would lessen any
    adverse impact on small business.

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