DFPI Invites Comments on Rulemaking Related to State Licensing Law

The California Department of Financial Protection and Innovation on Friday released draft text of a rulemaking related to the scope, annual report, and document retention requirements of the state’s Debt Collection Licensing Act.

Comments on the proposal are due by August 29 and may be submitted electronically or in writing. A copy of the instructions on how to submit comments can be accessed by clicking here. A copy of the proposed text can be accessed by clicking here.

The proposal would not require employees of debt collectors to be licensed when acting within the scope of their employment, and creditors collecting consumer debts in their own names are not considered to be debt collectors for the purposes of needing a license, unless certain conditions are met.

The proposal would require any licensed debt collectors to preserve records of “any contact with, or attempt to contact, anyone associated with a debtor account, regardless of who initiated the contact and whether the contact is unsuccessful,” according to the proposal. The record will need to include:

  • The name of the employee making the attempt of receiving the contact and the name of the person who contacted the licensee
  • The date and time of contact
  • The name and contact information of the person the licensee is attempting to contact
  • Whether the attempt resulted in direct or indirect communication with the debtor
  • A summary of the substance of the contact or message conveyed and whether a payment was made
  • If the call was recorded, the recording needs to be retained

Licensees will be required to retain this information, as well as additional documents, for at least seven years after the account being settled, returned back to the creditor, or if the account is sold or collection attempts have ceased.

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