The California Consumer Financial Protection Law for Businesses

Announcements:

What you need to know about the California Consumer Financial Protection Law

The California Consumer Financial Protection Law took effect January 1, 2021. Under the new law, the Department of Financial Protection and Innovation has expanded authority to regulate financial products and services that were previously unregulated.

They include:

  • Credit repair and consumer credit agencies
  • Debt relief providers
  • Rent to own contractors
  • Debt collectors
  • Private, for-profit school funding

Many previously unregulated financial products and services will be required to register with the Department under the new law. Below is some information on that process and timeline for registration.

Are you required to register with us?

If you provide a consumer financial product or service, you may be required to register. While the new law took effect January 2021, providers will not be required to register until after the Department finalizes registration requirements through the rulemaking process discussed below.

Our timeline for registering ‘new covered persons’

The Department will likely begin accepting registrations of new covered persons starting in 2023. We will provide updated information about registration as soon as it is available.

Rulemaking for the California Consumer Financial Protection Law

The new law has prompted many questions about the rulemaking process from companies seeking to ensure they will be in compliance. Below, you will find information about when rulemaking will begin, who will be required to register, and how to provide input on the implementation of the new law.

When will rulemaking begin?

On February 4, 2021, the Department published an Invitation for Comments asking stakeholders to provide input on regulations to implement the CCFPL. Stakeholders can find a copy of the Invitation for Comments here. The deadline to submit comments is March 8.

To streamline the process so it’s both efficient and tailored to different guidelines under the new California Consumer Financial Protection Law, the Department plans to prepare multiple rulemaking packages.

How will you know if you need to register?

The rulemaking process will determine who will need to register. The Department will use information submitted in response to its Invitation for Comments to understand who may be impacted by the new law. This information will help guide our rulemaking and registration process. We will provide updated information as soon as it is available.

How can you provide input?

The Department anticipates issuing additional Invitations for Comment in 2021 before beginning the formal rulemaking process with the Office of Administrative Law (OAL). Stakeholders are encouraged to submit feedback to the Invitations when they are available.

The Department will begin drafting regulations for the new law in mid-2021 and expects to file at least one rulemaking package with the OAL by the end of 2021.

More rulemaking packages will follow in subsequent years.

The new Collection Licensing Act

The new Debt Collection Licensing Act or SB 908 will require California debt collectors and buyers to be licensed by the Department. The law authorizes the Department to take borrowers’ complaints and enforce against violations. It will also give consumers a single location to check whether companies are licensed, and whether they have been subject to any enforcement actions, including license suspensions or revocations.

If you are a debt collector, are you still subject to the CCFPL?

The answer is yes. But if you obtain a debt collector license from us, you do not need to separately register under the CCFPL.

How do you get a debt collector license?

Under the new law, a debt collector must apply for a license with the Department prior to January 1, 2022, if the debt collector wishes to continue operating after January 1, 2022.

The Department will begin accepting applications for debt collector licenses in the late summer or early fall of 2021 so all debt collectors can meet the statutory deadline to apply by the end of 2021. We expect to review those applications and issue licenses in 2022 and 2023. The Department will update stakeholders on next steps once more information is available. To sign up to receive email updates, visit: https://public.govdelivery.com/accounts/CADFI/subscriber/new.

Rulemaking for the Debt Collection Licensing Act

The new law has prompted questions about the rulemaking process from companies seeking to ensure they will be in compliance. Included below is information that will help you determine when the rulemaking will begin, how to provide input, and who will be required to be licensed.

When will rulemaking begin? How can you provide input?

The Department plans to prepare multiple rulemaking packages to implement the new law. The Department is in the process of drafting regulations related to the license application process. On April 23, the Department published proposed regulations regarding the licensing process for debt collectors for public comment. Stakeholders can find a copy of the proposed regulations here. The deadline for comments is June 8, 2021.

More rulemaking packages will follow in subsequent years.

Last updated: May 4, 2021 @ 11:29 am

Approved by Maria Luisa Cesar 12/2020.