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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-17</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-03-23</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-04-08</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Jones</ns0:AuthorText>
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<ns0:Title>An act to amend Sections 100023 and 100025 of the Financial Code, relating to debt collection.</ns0:Title>
<ns0:RelatingClause>debt collection</ns0:RelatingClause>
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<ns0:Subject>Debt collection.</ns0:Subject>
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<html:p>The Debt Collection Licensing Act generally regulates the business of debt collection and prohibits a person from engaging in the business of debt collection in this state without first obtaining a license pursuant to the act. The act prescribes the duties and powers of the Commissioner of Financial Protection and Innovation, which include conducting prescribed examinations as often as the commissioner deems necessary and appropriate, and authorizing the commissioner to conduct those examinations electronically, as specified. The act also establishes the Debt Collection Advisory Committee to advise the commissioner on matters relating to debt collection or the debt collection business, as specified.</html:p>
<html:p>This bill would require the commissioner to conduct examinations remotely unless an onsite examination is considered necessary for the protection of the public, as specified. The bill would also rename the Debt Collection Advisory Committee as the Debt Collection Advisory Board, require the commissioner to request the advice of the board before the initial publication or adoption of fee schedules or a proposed regulation, except as specified,
and exempt the board from the Bagley-Keene Open Meeting Act.</html:p>
<html:p>Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.</html:p>
<html:p>This bill would make legislative findings to that effect.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 100023 of the
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is amended to read:
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<ns0:Num>100023.</ns0:Num>
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(a)
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Subject to subdivision (c), the commissioner shall examine the affairs of each licensee for compliance with this division. The commissioner shall appoint suitable persons to perform the examination. The commissioner and their appointees may examine the books, records, and documents of the licensee, and may examine the licensee’s officers, directors, employees, or agents under oath regarding the licensee’s debt collection operations.
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(b)
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The commissioner may cooperate with any agency of the state, the federal government, or other states in performing license examinations.
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(c)
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(1)
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Unless an onsite examination is considered necessary for the protection of the public, the commissioner shall conduct all examinations without a site visit to the business office of a licensee through the use of video technology by requesting that licensees submit required books and records to the department electronically, via a secure portal.
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(2)
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For purposes of paragraph (1), the commissioner may determine that an onsite examination is necessary for the protection of the public when any of the following conditions is met:
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(A)
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There is a court-adjudicated violation of Title 1.6C (commencing with Section 1788) of Part 4 of Division 3 of the Civil Code.
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(B)
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There is a court-adjudicated violation of Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code.
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(C)
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The licensee has had a debt collector license in another state suspended or revoked.
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(D)
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There is a concern identified during a remote examination.
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(3)
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(A)
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The commissioner shall adopt regulations determining the frequency of examinations required pursuant to this section.
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(B)
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The commissioner may
reduce the frequency or scope of an examination if the commissioner can obtain the results of a recent independent third-party audit or examination of the licensee that the commissioner finds to be of suitable quality and reliability, which may include, but is not limited to, any of the following:
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(i)
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An audit or examination conducted by another state that licenses debt collectors.
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(ii)
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An audit or examination conducted by the federal Consumer Financial Protection Bureau.
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(iii)
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An independent third-party audit or examination done in connection with a program administered by a nonprofit trade association that maintains rigorous compliance standards, as determined by the commissioner.
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(d)
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Unless otherwise exempt pursuant to Section 100001, affiliates of a licensee are subject to examination by the commissioner on the same terms as the licensee, but only when reports from, or examination of, a licensee provides documented evidence of unlawful activity between a licensee and affiliate benefitting, affecting, or arising from the activities regulated by this division.
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(e)
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The cost of each examination of a licensee shall be paid to the commissioner by the licensee examined, and the commissioner may maintain an action for the recovery of the cost in any court of competent jurisdiction. In determining the cost of the examination, the commissioner may use the estimated average hourly cost for all persons performing examinations of licensees or other persons
subject to this division for the fiscal year.
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(f)
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The statement of the findings of an examination shall belong to the commissioner and shall not be disclosed to anyone other than the licensee, law enforcement officials, or other state or federal regulatory agencies for further investigation and enforcement. Reports required of licensees by the commissioner under this division and results of examinations performed by the commissioner under this division are the property of the commissioner.
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(g)
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The commissioner shall provide a written statement of the findings of the examination, issue a copy of that statement to the
licensee, and take appropriate steps to ensure correction of any violations of this division.
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(h)
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Notwithstanding any provision of this division, the commissioner shall conduct an examination at each location operated by a licensee unless the operations are centralized or there are other factors acceptable to the commissioner.
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(i)
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In any proceeding under this division, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 100025 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
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<ns0:Num>100025.</ns0:Num>
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(a)
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There is within the Department of Financial Protection and Innovation, a Debt Collection Advisory Board.
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(b)
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(1)
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The Debt Collection Advisory Board shall advise the commissioner on matters relating to debt collection or the debt collection industry, including proposed fee schedules and the mechanics and feasibility of implementing requirements to be proposed in regulations.
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(2)
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Unless engaging in emergency rulemaking, the commissioner shall request the advice of the Debt Collection Advisory Board before the initial publication or adoption of fee schedules or a proposed regulation.
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(c)
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The Debt Collection Advisory Board shall consist of seven members; one of whom shall represent consumers.
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(1)
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The members of the Debt Collection Advisory Board shall be appointed by the commissioner.
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<html:p>
(2)
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The term of a member of the Debt Collection Advisory Board shall be two years. However, a member may be reappointed.
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(3)
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Membership in the Debt Collection Advisory Board shall be voluntary. No person shall be required to accept an appointment to the Debt Collection Advisory Board, and any member may resign at any time by filing a resignation with the commissioner.
</html:p>
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(4)
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No member of the
Debt Collection Advisory Board shall receive any compensation, reimbursement for expenses, or other payment from the state in connection with service on the Debt Collection Advisory Board.
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(d)
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The Debt Collection Advisory Board shall meet at least twice each calendar year.
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<html:p>
(e)
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The commissioner may, by order or regulation, prescribe rules governing the Debt Collection Advisory Board and its members, including, but not limited to, matters relating to meetings, quorum, and actions.
</html:p>
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(f)
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The Debt Collection Advisory Board is not subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
Code).
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<ns0:Num>SEC. 3.</ns0:Num>
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<html:p>The Legislature finds and declares that Section 2 of this act, which amends Section 100025 of the Financial Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that
constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:</html:p>
<html:p>Due to the unique nature of the matters dealt with by the Debt Collection Advisory Board, it is necessary for the board to be exempted from the Bagley-Keene Open Meeting Act.</html:p>
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