Financial services and consumer protection stakeholders met as the California Debt Collection Advisory Committee Wednesday in what was the first meeting of the group created under the Debt Collection Licensing Act (DCLA).
“Our goal here is to be proactive with frequent and early communications to external stakeholders,” said California Department of Financial Protection and Innovation (DFPI) Senior Deputy Commissioner Suzanne Martindale during the meeting. Martindale will lead the committee, which is required to meet at least twice a year.
One of the ACA International members named to the committee, Tamar Yudenfreund, senior director, public policy at Encore Capital Group and chair of ACA’s Federal Affairs Committee, said meeting more often, especially during the committee’s first year, is important.
Additional ACA members on the committee include Scott Hyman, attorney with Severson & Werson PC; Mark Naiman, president of Absolute Resolutions Corp.; Cindy Yaklin, president of States Recovery Systems Inc. and the California Association of Collectors Inc.; and Ohad Samet, president of TrueAccord Corp.
The committee will advise the DFPI on matters related to the debt collection business, including proposed fee schedules and other requirements.
More than 80 participants joined the first committee meeting, which was held online and open to the public.
“I think this committee is what we make of it,” Martindale said, adding that the goal of the first meeting was to develop next steps and action items.
Its members agreed that DFPI research on consumer communications and preferences would be helpful to shape how the consumer advocates and debt collectors can work together.
Yudenfreund said the research could include asking consumers about the benefits of resolving their debts to determine what methods will best serve consumers.
Samet said the use of technology in the debt collection process, which is prevalent at TrueAccord, is more than about sending an email to consumer about their account, it also presents the opportunity for research on consumers’ contact preferences.
Additional committee members include Elizabeth Gonzalez, directing attorney with the Consumer Law Unit at the Public Law Center, and Prasad Krishnamurthy, professor of law at the University of California Berkeley School of Law.
Gonzalez said the DFPI should be the point of contact for any research involving consumers requested by the committee rather than representatives of debt collectors, creditors or consumer advocates.
In response to the discussion, Martindale said some common themes of the meeting were documenting the life cycle of consumer debt, technological solutions and making sure the DFPI understands those processes.
“As the program lead, I want to be armed with the best information possible,” Martindale said.
Debt Collection Licensing
Martindale also said the DFPI is on schedule to have licensing applications available through the Nationwide Multistate Licensing System Sept. 1.
In addition to creating the Debt Collection Advisory Committee, the DCLA, which takes effect Jan. 1, 2022, requires any person engaging in the business of debt collection in California to be licensed by the DFPI.
Licensing applications will be due by Dec. 31, 2021, and are required starting Jan. 1, 2022.
Applicants may continue operating as a debt collector in California while applications are pending. Debt collectors that apply after Dec. 31, 2021, will be required to wait for the issuance of a license before you can operate in California, ACA previously reported.
The DFPI also reports that licensees interested in continuing their operations in California starting Jan. 1, 2022, should start gathering materials necessary to apply now to ensure they are ready when the applications are available. Failure to apply by the deadline and continued operation without a license may result in enforcement actions.
The DCLA (S.B. 908), from California State Sen. Bob Wieckowski, D-Fremont, was signed into law by Gov. Gavin Newsom in September 2020, as was legislation to create the DFPI.
An archive of the Debt Collection Advisory Committee meeting will be available on the DFPI’s website.