SENATE BILL 908:
Licensing for Debt Collectors By Jeffrey A. French, Esq.
The real impact will be on those that are doing the collections work for the associations.
O
n September 25, 2020, Governor
1, 2022. In order to meet the licensing
Newsom signed Senate Bill
start date in 2022, the Commissioner will
908 into law, enacting the Debt
spend much of 2021 adopting regulations
Collection Licensing Act (“DCLA”). The
designed to implement the licensing
adoption of the DCLA places California with
program. In recognition of the fact that
the majority of states that already require
there may be a flood of applications in late
consumer debt collectors to be licensed.
2021, any person or entity that submits
Senate Bill 908 is a part of California’s
an application before this date will be
recent triad of consumer financial services
permitted to operate in 2022 pending the
legislation, including AB 1864 (creates the
approval or denial of the application.
Department of Financial Protection and Innovation and the California Financial
The DCLA will supplement existing law
Protection Law) and AB 376 (creates a
such as the Rosenthal Fair Debt Collection
new Student Loan Borrower Bill of Rights).
Practices Act (“Rosenthal Act”) that
All of these bills are intended to enhance
prohibits debt collectors from engaging
consumer protection and provide greater
in unfair or deceptive acts or practices in
regulation of the persons and entities
the collection of consumer debts. Rather
engaged in debt collection.
than amend the Rosenthal Act to include a licensing obligation, the legislature decided
The DCLA became effective on January 1,
instead to create a new standalone statute
2021, requiring the Commissioner of the
which will be codified in a new part of the
Department of Business Oversight (soon to
state’s Financial Code. The two acts are
be the Department of Financial Protection
designed to work in concert regulating
and Innovation) to take all action necessary
consumer debt collection practices,
in order to be prepared to implement the
and effort has been made to avoid joint
licensing requirement effective January
prosecutions under each act.
10 The Law Journal Spring 2021 | cacm.org
