October 01, 2021

California Enacts Debt Collection Licensing Law

1 min

The California Legislature enacted the Debt Collection Licensing Act ("DCLA"), authorizing the Commissioner of Financial Protection and Innovation ("Commissioner") to license, investigate, and examine debt collectors, and to enforce the Rosenthal Fair Debt Collection Practices Act and the Fair Debt Buying Practices Act ("FDBPA") in September 2020.

Prior to enactment of the DCLA, debt collectors were not required to be licensed in California. The DCLA becomes operative on January 1, 2022.

Applications must be submitted via the Nationwide Multistate Licensing System & Registry (NMLS). A checklist of requirements for the application is also available on NMLS.

Under the DCLA a person engaged in the business of debt collection, unless exempt, must apply for a license to continue to operate in California pending the denial or approval of their application.

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