Update on Debt Collection and Private Student Loans Bills …


California’s legislative session for 2021 is over and two bills impacting the accounts receivable management industry are heading to the governor’s office in the coming weeks.

The first of two bills, which is expected to be signed by the governor, expands the scope of the Fair Debt Buying Practices Act of 2013 to focus on third-party debt collection agencies, said Andrew Madden, vice chairman of the unit of state and government of ACA International. business.

SB 531, sponsored by State Senator Bob Wieckowski, D-Fremont, would require third-party agencies responsible for collecting assigned receivables to provide, upon request and within 30 days, a statement that includes information about the account balance and the reason for the interest and fees, says Madden. The agency should also provide a date when the last payment was made by the consumer and the debt became unpaid.

It would also prohibit a debt collector from making a written statement to a consumer in an attempt to collect an overdue consumer debt, unless the third-party agency has access to a contract or other evidence showing that a debt is owed, Madden said.

There are exemptions in this legislation, however, if the agency does not have a signed contract or if it is revolving debt.

“SB 531 was a priority for the California Association of Collectors when it was introduced and there have been a number of amendments to ensure that requirements that could only apply to purchased debt did not occur. would not apply to the ceded debt, ”Madden said.

Private student loan collection reform

The California legislature also enacted the Private Student Loan Collection Reform Act, AB 424, sponsored by State Assembly Member Mark Stone, D-Monterey Bay.

The legislation places new documentation requirements on private student loan lenders before initiating any collection activity, Madden said. It also requires that student loan settlements by private lenders and debt collectors be made in open court.

California license and draft regulations

Meanwhile, the California Department of Financial Protection and Innovation (DFPI) continues to seek comments on the California Consumer Financial Protection Act (CCFPL) and Debt Collection Licensing Act (DCLA). recently enacted by October 5. ACA has already reported.

On April 8, 2021, the DFPI Commissioner launched a regulation to adopt regulations related to licensing requirements under the DCLA. The Commissioner is now considering a second regulation to adopt regulations related to other provisions of the DCLA, including its scope, annual reports and bond amounts.

The Commissioner invites interested parties to contribute to the development of regulations related to these topics and has formulated questions to help these parties provide this input. The Commissioner also invites interested parties to provide examples of language for regulations related to these subjects.

Agencies should also be made aware of new California licensing requirements under the DCLA, requiring California debt collectors and buyers to apply for a DFPI license by December 31, 2021.

The license request is now available on the Nationwide Multistate Licensing System website, ACA has already reported.

The DCLA, which comes into effect on January 1, 2022, requires anyone engaged in debt collection activity in California to be licensed by the DFPI.

The ACA licensing team has resources to help members navigate the licensing process.

“We have known this has been happening for some time and can walk members through the steps to apply for their license and make sure they know the DFPI requirements,” said Angela Butera, Licensing Officer.

For more information on how the ACA licensing staff can help you complete your license applications, please contact us at license@acainternational.org or call (952) 926-6547.


Comments are closed.