CRC Suggests California DFPI Modify Its Proposed Data Retention and Other Regulations


In July 2022, the California Department of Financial Institutions (DFPI) released proposed regulations that would impact licensing, reporting, and record retention. On August 29, 2022, the Consumer Relations Consortium (CRC) submitted comments to the DFPI to resolve the proposal’s conflicts with other California laws, confusing definitions and unreasonably burdensome requirements.

The CRC comments were prepared by Legal Advisory Council (LAB) members Joanne Needleman of Clark Hill, Brit Suttell of Barron and Newburgerin the same way Stefanie Jackman and Jonathan Floyd* of Troutman pepper.

In its comments, the CRC asked the DFPI to modify its proposed rule as follows:

  • Update license requirement definitions to ensure they do not duplicate other California laws. Duplicative licensing requirements place unnecessary burden and expense on debt collectors. By clarifying the definition to reference other California licensing laws, the DFPI would resolve potentially redundant requirements.
  • Specify that “goods sold” include “services rendered”. The proposed settlement requires licensees to calculate “net proceeds generated by California accounts receivable”. However, “goods sold” does not accurately reflect the services debt collectors render to their clients. By clarifying the definition, the DFPI would more accurately reflect the variety of services debt collectors provide to their clients.
  • Reduce proposed record retention requirement from seven years to three years. Seven years is longer than any other state or federal requirement. This time period conflicts with other California record retention requirements and puts consumer data at risk long after an account is terminated.
  • Update the records requirements with appropriate definitions to provide clarity and more accurately reflect the debt collection process. The proposed regulations require licensees to maintain records of “direct” or “indirect” communications, but do not define either of these terms. It also requires debt collectors to provide a summary of a contact or message that results in a payment, but does not explain how a debt collector should determine which communication led to a payment or how to handle scenarios in which a payment is made after a series of several communications. .

The full comment filed by the CRC can be viewed here.

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About the Consumer Relations Consortium

The Consumer Relations Consortium(CRC) is an organization comprised of over 60 national companies representing the diverse debt collection ecosystem, including creditors, data/technology vendors and compliance-focused debt collectors who are larger players in the market. Established in 2013, CRC is changing the debt collection paradigm by engaging stakeholders, including consumer advocates, federal and state regulators, academic and industry thought leaders, creditors and enforcement officers. recovery, and challenging them to go beyond talking points and focus on the real world. solutions that truly improve the consumer experience. CRC’s collaborative and candid approach is unique in the market. The CRC is managed by the iA Institute. Follow CRC on LinkedIn here.

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*not a member of the Legal Advisory Board

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