California Debt Collections Licensing Law Gets One Step Closer to Law | Troutman pepper

0

In a 9-3 vote earlier this month, the California Assembly’s Banking and Finance Committee approved legislation requiring licensing for debt collectors and buyers, called the Debt Collection Licensing Act. (SB 908) (DCLA).

The DCLA would prohibit a person from engaging in consumer debt collection activity in that state without a license and would comply with California Department of Business Oversight (DBO) reports, reviews, and other oversight. If enacted, for the first time since 1992, consumer debt collection agencies and debt buyers in California would be subject to licensing requirements. The DCLA would also require the DBO to respond to consumer complaints and enforce violations.

The DCLA exempts banks and credit unions from the requirement to obtain a license while allowing DBO to bring legal actions against these entities for violating existing laws on the fair collection of debts to which they are already submitted. The California Creditors Bar Association continues to oppose the DCLA unless it is amended to exempt attorneys from licensing requirements in the same manner as banks, mortgage banks, and real estate brokers.

The DCLA has already passed the California Senate 29-4. The California Assembly Appropriations Committee and the entire Assembly will then consider the bill. The Assembly Appropriations Committee scheduled a discussion on DCLA for Tuesday, August 18 and continued the discussion through Thursday, August 20. California Governor Gavin Newsom has indicated he will sign the bill if it reaches his office.

Troutman Pepper will continue to monitor this legislation and provide an update on any changes to the DCLA.

Share.

Comments are closed.