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<ns0:Id>20250SB__113198AMD</ns0:Id>
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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:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Jones</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Jones</ns0:Name>
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<ns0:Title>An act to amend Sections 100000, 100000.7, 100001, 100002, 100003, 100004, 100005, 100007, 100018, 100020, 100021, 100023, and 100025 of the Financial Code, relating to debt collection.</ns0:Title>
<ns0:RelatingClause>debt collection</ns0:RelatingClause>
<ns0:GeneralSubject>
<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 requires a license to be obtained for a licensee’s principal place of business and does not require separate licenses for each individual branch office. The act exempts specified persons and activities from its provisions. The act prescribes the duties and powers of the Commissioner of Financial Protection and Innovation, which includes revoking or suspending any license for a violation of the Fair Debt Collection Practices Act or specified fair debt buying practices provisions. The act requires an applicant to, among other things, pay an application fee of $350 and an
annual fee based on a prescribed formula, as specified. The act also requires a licensee to file an annual report with prescribed information, including the total or face dollar amount of various kinds of accounts. The act also requires the commissioner to conduct prescribed examinations as often as the commissioner deems necessary and appropriate, and authorizes 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 rename the act to the Debt Collector Licensing Act. The bill would instead require a single license for a licensee’s business and not require separate licenses for each individual branch office, facility, affiliate, or subsidiary of the licensee. This bill would exempt additional persons and activities from the act’s provisions. The bill
would also limit the commissioner’s power to suspend a license for a violation of the Fair Debt Collection Practices Act or specified fair debt buying practices provisions if the violation has been adjudicated by a court. The bill would also increase the application fee to $1,000 and change the annual fee to $1,000, $4,000, or $7,000 based on the number of California debtor accounts in active collection, as specified. The bill would remove the requirement to report information regarding total or face dollar amounts of various kinds of accounts referenced above. The 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. The bill would also make other technical and conforming changes.</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 100000 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
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<ns0:Num>100000.</ns0:Num>
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<html:p>This division shall be known, and may be cited, as the Debt Collector Licensing Act.</html:p>
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 100000.7 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
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<ns0:Num>100000.7.</ns0:Num>
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<html:p>A county, city, or other political subdivision within this state shall not require a debt collector to be licensed or to register as a debt collector.</html:p>
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<ns0:Num>SEC. 3.</ns0:Num>
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Section 100001 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
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<ns0:Num>100001.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A person shall not operate as a debt collector in this state without first obtaining a license pursuant to this division.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
For purposes of paragraph (1), to the extent permitted by federal law, a person is acting in this state if the person is located in this state and is seeking to collect from a debtor that resides inside or outside the state, or is located outside of the state and is seeking to collect from a debtor that resides in this state.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A single license shall be obtained for the licensee’s business and shall not be transferred or assigned.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A separate license is not required for each individual branch office, facility, affiliate, or subsidiary of the licensee.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Except as provided in paragraph (2), this division shall not apply to any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A depository institution, as defined in Section 1420, or any regulated
affiliate or subsidiary of that institution.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A person licensed pursuant to Division 9 (commencing with Section 22000).
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A person licensed pursuant to Division 20 (commencing with Section 50000).
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
A person who is subject to the Karnette Rental-Purchase Act (Title 2.96 (commencing with Section 1812.620) of Part 4 of Division 3 of the Civil Code).
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
A trustee performing acts in connection with a nonjudicial foreclosure pursuant to Article 1 (commencing with Section 2920) of Chapter 2 of Title 14 of Part 4 of Division 3 of the Civil Code.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
A person described in Section 1692a(6)(F) of Title 15 of the United States Code.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
A person or entity licensed pursuant to or subject to the State Bar Act (Chapter 4 (commencing with Section 6000) of Division 3 of the Business and Professions Code).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The commissioner may use the authority described in Section 100005 in connection with a court-adjudicated violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code by a person described in paragraph (1).
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
This division shall not apply to any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Debt collection regulated pursuant to Division 12.5 (commencing with Section 28100).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The collection of covered commercial debt or covered commercial credit, as those terms are defined in Section 1788.2 of the Civil Code.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Debt collection regulated pursuant to Section 6077.5 of the Business and Profession Code.
</html:p>
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<ns0:Num>SEC. 4.</ns0:Num>
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Section 100002 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
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<ns0:Num>100002.</ns0:Num>
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<html:p>For purposes of this division, the following terms have the following meanings:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Applicant” means a person, including a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other entity, who applied for a license pursuant to this division.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“California debtor accounts” means accounts that are owned by consumers who reside in California at the time that the consumer makes a payment on the account.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Commissioner” means the Commissioner of Financial Protection and Innovation.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
“Consumer credit transaction” means a transaction between a natural person and another person in which property, services, or money is acquired on credit by that natural person from the other person primarily for personal, family, or household purposes.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
“Consumer debt” or “consumer credit” means money, property, or their equivalent, due or owing, or alleged to be due or owing, from a natural person by reason of a consumer credit transaction. The term “consumer debt” includes a mortgage debt. The term “consumer debt” includes “charged-off consumer debt” as defined in Section 1788.50 of the Civil Code.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
“Creditor” means a person who extends consumer credit to a debtor.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
“Debt” means money, property, or their equivalent that is due or owning or alleged to be due or owing from a natural person to another person.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
“Debt collection” means any act or practice in connection with the collection of consumer debt.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
“Debt collector” means any person who, in the ordinary course of business, regularly, on the person’s own behalf or on behalf of others, engages in debt collection. The term includes any person who composes and sells, or offers to compose and sell, forms, letters and other collection media used or intended to be used for debt collection. The term “debt collector” includes “debt buyer” as defined in Section 1788.50 of the Civil Code.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
“Debtor” means a natural person from whom a debt collector seeks to collect a consumer debt that is due or owing or alleged to be due or owing from the person.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
“Department” means the Department of Financial Protection and Innovation.
</html:p>
<html:p>
(l)
<html:span class="EnSpace"/>
“Fund” means the Debt Collection Licensing Fund established pursuant to Section 100006.5.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
“Licensee” means a person licensed, conditionally or unconditionally, pursuant to this chapter.
</html:p>
<html:p>
(n)
<html:span class="EnSpace"/>
“Nationwide Multistate Licensing System & Registry” means a system of record, created by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, for nondepository, financial services licensing or registration in participating state agencies, the District of Columbia, Puerto Rico, the United States Virgin Islands, and Guam.
</html:p>
<html:p>
(o)
<html:span class="EnSpace"/>
“Person” means a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other similar entity.
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<ns0:Num>SEC. 5.</ns0:Num>
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Section 100003 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
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<ns0:Num>100003.</ns0:Num>
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(a)
<html:span class="EnSpace"/>
The commissioner shall administer this division and may adopt rules and regulations, and issue orders, consistent with that authority.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Without limitation, the functions, powers, and duties of the commissioner include all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
To issue or to refuse to issue a license as provided in this division.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
To allow affiliated companies to be under a single license. The commissioner shall adopt regulations specifying what constitutes an affiliated company for these purposes.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
To revoke or suspend any license for a violation of this division or a
court-adjudicated violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
To keep records of licenses issued under this division.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
To receive, consider, investigate, and act upon a complaint made in connection with a licensee.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
To prescribe the form of and to receive applications for licenses and reports, books, and records required to be made or retained by a licensee.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
To subpoena documents and witnesses, and to compel their attendance and production, to administer oaths, and to require the production of books, papers, or other materials relevant to any inquiry authorized by this division.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
To require information with regard to an applicant that the commissioner may deem necessary, with regard for the paramount public interest in ascertaining the experience, background, honesty, truthfulness, integrity, and competency of an applicant for collecting consumer debt, and if an applicant is an entity other than an individual, in ascertaining the honesty, truthfulness, integrity, and competency of officers, directors, or managing members of the corporation, association, or other entity, or the general patters of a partnership.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
To enforce by order any provision of this division.
</html:p>
<html:p>
(10)
<html:span class="EnSpace"/>
To levy fees, fines, and charges in an amount sufficient to cover the cost of the services performed in administering this division. The fees collected pursuant to this division shall not exceed the costs of administering
this division.
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<ns0:Num>SEC. 6.</ns0:Num>
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Section 100004 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
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(a)
<html:span class="EnSpace"/>
Notwithstanding any law the commissioner shall have the authority to conduct investigations and examinations of an applicant or licensee as follows:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
For purposes of determining whether an applicant is eligible for a license, or that a licensee is complying with the provisions of this division or any regulation or order of the commissioner, the commissioner may access, receive, and use any books, accounts, records, files, documents, information, or evidence that relates to debt collection, including, but not limited to, any of the following relating to the intent to, or the practice of, collecting consumer debt:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Criminal, civil, and administrative history information.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Personal history and experience information, including, but not limited to, independent credit reports obtained from a consumer reporting agency.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Any other documents, information, or evidence that the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of those documents, information, or evidence.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
For the purposes of investigating violations or complaints arising under this division, the commissioner may direct, subpoena, or order the attendance of, and examine under oath, any person whose testimony may be required about the consumer debt or account of the debtor.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
In making any examination or investigation authorized by this section, the commissioner may control access to
any documents and records of the licensee or person under examination or investigation. The commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, a person shall not remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the documents or records of a licensee have been, or are at risk of being, altered or destroyed for purposes of concealing a violation of this division, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct their ordinary business affairs.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The commissioner may permit affiliated companies to be subject to a single examination. The department shall list all affiliated company names on the license and
shall post them on the department’s internet website.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_560BAA4B-459C-4BE8-A876-08763EBE052B">
<ns0:Num>SEC. 7.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:FIN:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'25.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'100005.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 100005 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_5E3F0286-187B-48BF-B717-86A0F51800B9">
<ns0:Num>100005.</ns0:Num>
<ns0:LawSectionVersion id="id_A285B7C4-1D05-446E-8824-42ACC08ADE6F">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
If, in the opinion of the commissioner, a person who is required to be licensed under this division is operating as a debt collector without a license from the commissioner, or a person or licensee has violated any provision of this division, an order, or a regulation adopted pursuant to this division, or Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, the commissioner may do any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
After notice and an opportunity for a hearing, order the person or licensee to desist and to refrain from engaging in the business of further continuing the violation.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
After notice and an opportunity for a hearing, order the person or licensee to pay ancillary relief. The ancillary relief may include, but need not
be limited to, refunds, restitution, disgorgement, and payment of damages, as appropriate, on behalf of a person injured by the conduct or practice that constitutes the subject matter of the assessment. A person or licensee may dispute an order to pay ancillary relief for an individual violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, if the same injured person brought an action for the same violation against the same person or licensee in court, the action resulted in a final judgment on the merits, and all damages, penalties, or fees have been paid to the injured person.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
If, in the opinion of the commissioner, a depository institution, as defined in Section 1420, a person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000), or a person licensed pursuant to Part 1 (commencing with
Section 10000) of Division 4 of the Business and Professions Code, has violated Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, the commissioner may take the actions described in paragraphs (1) and (2) of subdivision (a).
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
If, within 30 days after an order issued pursuant to subdivision (a) or (b) is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order shall be deemed rescinded.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_C16C5B18-96EA-4DF9-8636-14537CC65FCD">
<ns0:Num>SEC. 8.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:FIN:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'25.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'100007.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 100007 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_C13980F1-D72D-4D30-8CE7-80B5F652DA00">
<ns0:Num>100007.</ns0:Num>
<ns0:LawSectionVersion id="id_3168B72D-C20C-4C72-903F-970E1A97FFB9">
<ns0:Content>
<html:p>An applicant shall apply for a license by submitting both of the following to the commissioner:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
A completed application for a license in a form prescribed by the commissioner and signed under penalty of perjury. An application shall include the location of the applicant’s principal place of business and all branch office locations.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
An application fee, of one thousand dollars ($1,000), and an investigation fee, the amount of which shall be determined by the department, to cover any costs incurred in processing an application, including a fingerprint processing and criminal history record check under Section 100009. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The fees assessed pursuant to this subdivision shall be billed and collected by the commissioner at the time of initial application.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_6AFCDEF4-3B34-4FE2-87C5-16FBAB8EFD41">
<ns0:Num>SEC. 9.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:FIN:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'25.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'100018.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 100018 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_846D2271-1D77-48CF-944D-68C2D8F7AB93">
<ns0:Num>100018.</ns0:Num>
<ns0:LawSectionVersion id="id_C1461CAF-C9DF-4136-BEB0-BB4938D12272">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
A licensee shall notify the commissioner, in writing, of any change in the information provided in the application for a license, as applicable, not later than 30 days after the occurrence of the event that results in the information becoming inaccurate or incomplete.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
If a licensee seeks to change its place of business to a street address other than that designated in its license, the licensee shall provide written notice to the commissioner at least 10 days prior to the change.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A licensee shall not operate as a debt collector at a new location in a name other than a name approved by the commissioner.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A licensee that opens a new branch office or changes the location of an existing branch office shall notify the commissioner in writing of the new or changed branch office location within 30 days after the branch office begins business.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_1D96965D-6257-4EA7-BF01-D65F7F27FE02">
<ns0:Num>SEC. 10.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:FIN:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'25.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'100020.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 100020 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_4AB916AD-BDA4-426F-99D7-246FAE28E905">
<ns0:Num>100020.</ns0:Num>
<ns0:LawSectionVersion id="id_034A835C-D6AD-40DE-BA7A-97ABD99D9E7E">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Each licensee shall pay to the commissioner an annual pro rata fee for all costs and expenses reasonably incurred in the administration of this
division by December 31 of each year, as determined pursuant to paragraph (2).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Subject to subparagraph (B), the annual pro rata share shall be divided into three tiers based on the total number of California debtor accounts in active collection in the preceding year, as follows:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Tier 1 shall be one thousand dollars ($1,000).
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Tier 2 shall be four thousand dollars ($4,000).
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Tier 3 shall be seven thousand dollars ($7,000).
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A fee charged pursuant to subparagraph (A) shall not exceed the reasonable costs to the department to administer this division.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The commissioner, with the advice of the Debt Collection Advisory Board, shall determine the threshold number of California debtor accounts in active collection for each tier described in subparagraph (A) by June 30 of each year for the amount due by December 31 of that year.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
If
payment is not made by December 31, the commissioner shall assess and collect a penalty, in addition to the fee, of 5 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Annual fees are independent of fees associated with investigations and examinations.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
If a licensee fails to pay the annual fees on or before December 31, the commissioner may by order summarily suspend or revoke the license issued to the licensee within 30 days. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when the license is revoked or suspended, a licensee shall not operate as a debt collector in this state pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Notwithstanding subdivisions (a) to (d), inclusive, the commissioner may by rule require licensees to pay annual fees through the Nationwide Multistate Licensing System & Registry.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_CE866CA6-E4FD-4C22-B2DE-DE3A9247D24D">
<ns0:Num>SEC. 11.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:FIN:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'25.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'100021.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 100021 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_FDDF4897-168E-42EB-831A-F729B959168C">
<ns0:Num>100021.</ns0:Num>
<ns0:LawSectionVersion id="id_A921D967-1DCF-4C6D-B29C-2714B802B9D9">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
A licensee shall file an annual report with the commissioner, on or before March 15, that contains all relevant information that the commissioner reasonably requires concerning the business and operations conducted by the licensee in the state during the preceding calendar year, including information regarding collection activity. The report shall, at minimum, require disclosure of all of the following information:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The total number of California debtor accounts in active collections in the preceding year.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Whether or not the licensee is acting as a debt collector, debt buyer, or both.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The case number of any action in which the licensee was held liable by final judgment under Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The individual annual reports filed pursuant to this section shall be made available to the public for inspection.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The report shall be made under oath and in the form prescribed by the commissioner.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
A licensee shall make other special reports that may be required by the
commissioner.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_D868A10B-EB23-4D41-9E3A-9B6A1524D8F3">
<ns0:Num>SEC. 12.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:FIN:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'25.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'100023.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 100023 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_A53286B2-2F24-4392-B4D9-DE964D0610C1">
<ns0:Num>100023.</ns0:Num>
<ns0:LawSectionVersion id="id_A91CA664-CC25-45CB-93A6-B46EB81110A1">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The commissioner may cooperate with any agency of the state, the federal government, or other states in performing license examinations.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
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:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
There is a court-adjudicated violation of Title 1.6C (commencing with Section 1788) of Part 4 of Division 3 of the Civil Code.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The licensee has had a debt collector license in another state suspended or revoked.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
There is a concern identified during a remote examination.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The commissioner shall adopt regulations determining
the frequency of examinations required pursuant to this section.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
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:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
An audit or examination conducted by another state that licenses debt collectors.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
An audit or examination conducted by the federal Consumer Financial Protection Bureau.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
In any proceeding under this division, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_7815C279-4331-426E-B33C-92DA011D3B1D">
<ns0:Num>SEC. 13.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:FIN:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'25.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'5.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'100025.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 100025 of the
<ns0:DocName>Financial Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_FB3C9457-9CF0-4D90-9AC8-E5474199B619">
<ns0:Num>100025.</ns0:Num>
<ns0:LawSectionVersion id="id_D7768DB7-D6B1-4A72-9D37-67539548C3F7">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
There is within the Department of Financial Protection and Innovation, a Debt Collection Advisory Board.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The Debt Collection Advisory Board shall consist of seven members; one of whom shall represent consumers.
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The members of the Debt Collection Advisory Board shall be appointed by the commissioner.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The term of a member of the Debt Collection Advisory Board shall be two years. However, a member may be reappointed.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
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>
<html:p>
(4)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The Debt Collection Advisory Board shall meet at least twice each calendar year.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
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>
<html:p>
(f)
<html:span class="EnSpace"/>
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).
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_C568E67B-298E-4E5E-83DE-9E275B64D32C">
<ns0:Num>SEC. 14.</ns0:Num>
<ns0:Content>
<html:p>The Legislature finds and declares that Section 13 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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