DFPI Second Rulemaking Proposal On Debt Collection Licensing

On July 15, the California DFPI released draft text for a proposed second rulemaking under the Debt Collection Licensing Act (DCLA) relating to the scope, annual report, and bond amount increase provisions of the DCLA.

Some examples of the proposed amendments include:

• a new definition of "engage in the business of debt collection" that expressly includes advertising or otherwise offering the service of debt collection;
• an exclusion that employees of debt collectors are not required to be licensed if acting within the scope of their employment with a debt collector licensed in California;
• conditions under which a creditor, in its own name, seeking repayment of a consumer debt arising from credit the creditor extended could be considered as engaging in the business of debt collection for purposes of licensure in California;