New Covered Persons
The passage of the California Consumer Financial Protection Law expanded our oversight to include credit repair and consumer credit reporting companies, debt collectors, debt relief companies, private student loan servicers, and others. Thanks to the new law, we can now investigate most claims of unlawful, unfair, deceptive and abusive practices by financial service providers, adding even more protections to California consumers. The newly created Division of Consumer Financial Protection is responsible for supervising and regulating financial activities not previously overseen by the Department.
What Are New Covered Persons?
The California Consumer Financial Protection Law (CCFPL) makes it unlawful for certain financial service providers to engage in unlawful, unfair, deceptive, or abusive acts or practices. Under the law, “new covered persons” refers to providers of financial products and services previously unregulated by the Department and which are subject to oversight.
These include, but are not limited to:
The newly covered products and services include:
- Credit repair and consumer credit reporting companies
- Debt relief companies
- Debt collectors
- Private, for-profit school funding
Many previously unregulated “new covered persons” will be required to register with the Department under the new law. Below are answers to common questions about the registration process and a timeline for registration.
- Is Your Business 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.
- 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 an 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.
- What Is The 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 Did Rulemaking Begin?
Official rulemaking with the Office of Administrative Law (OAL) to implement the CFPL has not yet commenced. However, the Department has been gathering information from stakeholders to assist the preparation of rulemaking.
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 (PDF) and the Comments received. The deadline to submit comments was March 8.
Based on the feedback received, the Department issued two additional Invitations for Comments.
On August 18, 2021, the Department published an Invitation for Comments regarding commercial financing to small businesses, nonprofits, and family farms (PDF). Draft text (PDF) accompanied the Invitation. A copy of the comments received can be found here . The comment period ended on September 17.
On August 18, 2021, the Department published an Invitation for Comments regarding consumer complaints (PDF). Draft text (PDF) accompanied the Invitation. A copy of the comments received can be found here. The comment period ended on September 17.
The Department anticipates issuing additional Invitations for Comments in the future, including on the subject of registration requirements for new covered persons.
- How Can People Provide Input?
As the Department issues additional Invitations for Comment, stakeholders are encouraged to submit feedback to the Invitations when they are available.
Additional opportunities for stakeholder input will be available during the public comment periods once the Department commences official rulemaking with OAL.
More rulemaking packages will follow in subsequent years.
For Information specific to Debt Collectors and the new Debt Collection Licensing Act, please visit our Debt Collectors page.
References And Additional Information:
- Announcement: The Department of Financial Protection and Innovation is accepting comments relating to possible CCFPL regulations. Deadline – March 8, 2021 (PDF).
- Announcement: The Department of Financial Protection and Innovation is soliciting applications for the new Debt Collection Advisory Committee.
- Assembly Bill 1864: California Consumer Financial Protection Law (CCFPL)
- California Consumer Financial Protection Law: Regulations, Legislation, Opinions, and Releases
- California’s Legislature Approves Consumer Protection Bills (American Banker, September 1, 2020)
- California Lawmakers Approve Budget Proposal to Create Financial Watchdog for Consumers (Consumer Reports, September 1, 2020)
- California Seeks New Fintech Regulation in Agency Overhaul (Bloomberg, January 10, 2020)