DFPI says debt collection licenses are ‘inevitably delayed’

On May 23, the California Department of Financial Protection and Innovation (DFPI) sent a notice to applicants and potential applicants announcing unforeseen delays in issuing licenses under the Debt Collection Licensing Act. The FBI has advised the DFPI that further changes are needed to state agency protocols for requesting federal background checks. Prospective licensees are encouraged to continue submitting applications through the National Multi-State Licensing System. The DFPI said that during this time (which “is necessary to allow the Department to perform the licensing background check required under the Debt Collections Licensing Act”), “applicants may continue to exercise their activities and the Department will not take action for unauthorized activities against applicants who filed their applications after December 31, 2021.” DFPI will contact applicants with instructions for submitting fingerprints for background checks when the process is complete. available, and will notify licensees that “[f]or for purposes of including California debt collection license numbers when contacting or communicating with debtors pursuant to Civil Code Section 1788.11, a plaintiff who filed their claim through the NMLS may state “pending license number” or similar verbiage until a license is issued. The DFPI will notify applicants when it begins issuing licenses and encourage them to check the Department’s website for updates.