California Department of Financial Protection and Innovation "DFPI" issues notice of proposed rulemaking under Debt Collection Licensing Act
On February 9, 2024, the California Department of Financial Protection and Innovation (DFPI) announced a proposed regulatory update focusing on specific reporting and assessment requirements under the Debt Collection Licensing Act (DCLA). Notably, this proposal does not address prior public comments related to a separate rulemaking effort concerning the DCLA's scope and its applicability to creditors—those who extend consumer credit.
Assessment Obligations for Licensees
Under the DCLA, licensed debt collectors are required to contribute annually to the Department's operational costs. This assessment, set to take effect in 2024, is determined based on each licensee's proportional share of expenses. A key factor in this calculation is the "net proceeds" derived from California debtor accounts over the previous year. However, the term "net proceeds" currently lacks a statutory definition.
To provide clarity, the proposed rule seeks to amend Title 10, Section 1850 of the California Code of Regulations, introducing a formal definition of net proceeds.
Annual Reporting Enhancements
In addition to assessment requirements, the DCLA mandates that licensees submit annual reports to the DFPI Commissioner. The proposed rule expands on existing reporting guidelines by specifying additional disclosure requirements and mandating electronic submission of reports.
Public Comment Period Open Until March 27, 2024
Stakeholders and interested parties have until March 27, 2024, to submit comments on the proposed rulemaking. More details on the DFPI's regulatory update can be found in the official notice.
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