By the Collection’s Agitator
Hey Tribe, we have arrived at that part of the year when gift-giving tests those who want immediate gratification. Sometimes you know just what you will receive because your list is straightforward. Other times, you get something unexpected but useful, something you hadn’t thought of nor realized you need. Still, you accepted it with gratitude and appreciation.
The California Legislature, along with its Governor Gavin Newsom, joined in the giving festivities. California’s consumers now have added debt collection protections under what I will call California debt collection 2.0.
Last year we discussed California’s version of the FDCPA-namely the Rosenthal Fair Debt Collection Practices Act. Unlike the fed’s FDCPA, Rosenthal applies to original creditors and subsequent debt holders/collectors; it also applies to entities that assume or purchase the debt before default.
The Legislature clarified that attorneys are no longer exempt from the Act’s provisions. And — mortgage loans are now recognized as consumer debt (debt incurred for personal, family, or household purposes) and loan servicers are also bound. I think I see the marching bands, fireworks, and dancing following this last illumination.
The Great Recession may not have been Great had logic and Legislative clarity merged some ten years earlier.
Hmm, is that all?
Well, no, in 2022, Golden State residents will see additional debt collector requirements and consumer protections take effect. Starting January 1, debt collectors and buyers operating in California must apply for and hold a valid license. Yes, California has joined some of her sister states in mandating debt collecting/buying licensure in the state. Licensure gives the state improved visibility into and accountability of debt collection entities operating within its borders.
Senate Bill-908, the Debt Collection Licensing Act (DCLA), and grants California’s Office of Business Oversight authority to enforce creditor obligations. At the same time, they are protecting residents from unlawful and unethical debt collection practices. SB-908 employs limited administrative remedies to bring collection entities into compliance. Legislators omitted monetary and other civil penalties recognizing those options were available via Rosenthal, FDBPA, and FDCPA.
Immediate Tasks: 1. California residents- ask if the debt collector has a license to operate in the state as your first point of engagement (as of Jan 1. 2022)
2. Check back next month as we discuss more California changes for debt collectors.
3. Be safe as we close out 2021 and invite in 2022!