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ARTICLE · 21 APRIL 2026

California DFPI Faces Class Action On Debt Collection Licensing Regime

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A California class action challenges the state's debt collector licensing fee structure, alleging that annual assessments imposed by the DFPI exceed reasonable regulatory costs, lack transparent calculation formulas, and violate Proposition 26. The lawsuit seeks relief on behalf of approximately 1,243 licensed debt collectors statewide and could reshape how California structures licensing fees for financial services companies.

United StatesFinance and Banking
A.J. Dhaliwal
A.J. Dhaliwal
Mehul Madia
Mehul Madia
Maxwell Earp-Thomas
Maxwell Earp-Thomas
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On April 7, two trade associations and a licensed debt collector filed a putative class action in the California Superior Court for the County of San Francisco alleging that the California DFPI’s annual debt-collector licensing assessments violate the Debt Collection Licensing Act, Proposition 26, and the California Administrative Procedure Act. The complaint also alleges that the assessment scheme fails to provide a clear, adequately disclosed formula for calculating annual fees.

The class action challenges DFPI’s 2025 annual assessments for licensed debt collectors and seeks relief on behalf of a proposed class of about 1,243 licensees statewide. Specifically, the suit alleges that DFPI’s fee regime is unlawful because:

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