California had been one of 16 states that did not require licensing of debt collectors. That changed last year with the enactment of the Debt Collection Licensing Act. 2020 Cal. Stats. ch. 163 (SB 908). The DCLA will effect at the beginning of next year and provides for the licensing and regulation of debt collectors.
As defined by the DCLA, a debt collector is “”any person who, in the ordinary course of business, regularly, on behalf of that person or others, engages in debt collection.” Fin. Code § 100002(j). “Debt collection” is defined as “any act or practice in connection with the collection of consumer debt”. The term “debt collector” includes any person who composes and sells, or offers to compose and sell, forms, letters and other collection media used or intended to be used for debt collection. The term “debt collector” includes “debt buyer” as defined in Section 1788.50 of the Civil Code.
The DCLA exempts a several classes of persons, including depository institutions (e.g., FDIC-insured banks, credit unions, DFPI-licensed finance lenders and brokers, DFPI-licensed mortgage lenders and servicers, Department of Real Estate licensed agents, persons subject to the Karnette Rental-Purchase Act, a trustee for a nonjudicial foreclosure, and debt collections regulated under the Student Loan Servicing Act). Fin. Code § 100001(b)(1), (2). The DCLA, however, does not expressly exempt licensed attorneys.
In August, the DFPI issued an invitation for comments regarding possible additional rulemaking, including the scope of the DCLA. Today is the deadline for responding to the invitation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.