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 will take 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, the likely answer is yes. While the new law will take effect January 2021, you will have some time before you are required to register.

Our timeline for registering ‘new covered persons’

The Department will likely begin accepting registrations of new covered persons on January 1, 2023.

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?

Rulemaking will begin in 2021. 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.

During 2021, the Department plans to work on two packages:

  • registration process regulations
  • enforcement regulations

How will you know if you need to register?

The rulemaking process will determine who will need to register. The listening sessions the Department is embarking on will help staff solicit input and feedback from stakeholders who may be impacted by the new law. This information will help guide our rulemaking and registration process.

How can you provide input?

The Department is planning to offer several opportunities to gather feedback. To assist with rulemaking and ensure stakeholder input is included in the drafting phase, the Department is hosting ‘listening sessions’ in November and December 2020 and may add additional sessions in early 2021. The Department will also likely issue one or more “Invitations for Comments” prior to commencing the official rulemaking process with the Office of Administrative Law or OAL.

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

More rulemaking packages will follow in subsequent years.

The new Debt Collector Law

The new Debt Collector Law 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 Debt Collector 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.

 Rulemaking for the Debt Collector Law

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 Debt Collector law. The Department is in the process of drafting regulations related to the license application process. Presently, we anticipate filing that proposed rulemaking package with the OAL in the first quarter of 2021.  Public comment will be solicited at that time.

More rulemaking packages will follow in subsequent years.

Last updated: Jan 12, 2021 @ 11:21 am

Approved by Maria Luisa Cesar 12/2020.