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California fundamentally reshaped the regulatory landscape for debt collectors and debt buyers with the passage of two landmark pieces of legislation in 2020: AB 1864, the California Consumer Financial Protection Law (CCFPL), and SB 908, the Debt Collection Licensing Act. Together, these laws brought debt collection activities under the licensing authority and regulatory oversight of the Department of Financial Protection and Innovation (DFPI) for the first time, imposing new obligations on companies that collect consumer debts in California or from California residents. The Law Offices of Alan Abergel, P.C. (LOAA) serves as a California debt collection license lawyer for debt collectors and debt buyers navigating this regulatory framework, providing legal services that encompass licensing, compliance, document drafting, transactional matters, and defense in enforcement proceedings before the DFPI and the Consumer Financial Protection Bureau (CFPB). LOAA does not represent consumers. The firm represents California debt collection companies and debt buyers, including companies operating from California and those located outside the state that serve California customers.
SB 908, the Debt Collection Licensing Act, established California's first comprehensive licensing requirement for debt collectors and debt buyers. Signed into law in 2020, the statute requires any person engaged in the business of debt collection in California to obtain a license from the DFPI. The licensing requirement applies to third-party debt collectors that collect debts on behalf of creditors, debt buyers that purchase defaulted consumer debts and collect on those accounts, and other entities that fall within the statute's broad definition of debt collection activity. The Act took effect on January 1, 2022, with the DFPI beginning to accept license applications through the Nationwide Multistate Licensing System (NMLS) platform on September 1, 2021.
The original statutory timeline required debt collectors and debt buyers to submit their license applications by December 31, 2021. Companies that applied before that deadline were permitted to continue operating while their applications were under review. The DFPI subsequently extended this operational grace period, allowing any debt collector that submitted an application before January 1, 2023, to continue operating pending the approval or denial of the application. Companies that failed to apply within these windows or that apply after the grace period has closed are required to wait for the DFPI to issue a license before they can lawfully engage in debt collection activities involving California consumers.
The DFPI's final regulations implementing the Debt Collection Licensing Act became effective on December 22, 2021, establishing the detailed requirements that applicants and licensees must satisfy. These regulations address the license application process, financial requirements, surety bond obligations, record-keeping standards, reporting obligations, and the operational practices that licensed debt collectors must follow. LOAA assists debt collectors and debt buyers with every aspect of the DFPI licensing process, from initial application preparation through responses to examiner inquiries and the resolution of any conditions or deficiencies identified during the review period.
While the Debt Collection Licensing Act established the specific licensing framework for debt collectors, the California Consumer Financial Protection Law (CCFPL), enacted through AB 1864, provides the broader regulatory foundation upon which the DFPI's authority over debt collection rests. The CCFPL took effect on January 1, 2021 — a full year before the Debt Collection Licensing Act's licensing requirement — and immediately brought debt collectors within the DFPI's supervisory and enforcement jurisdiction as covered persons under the new law.
The CCFPL grants the DFPI expansive authority to oversee financial service providers, including the power to require registration, collect industry data, conduct examinations and investigations, and take enforcement action against entities that engage in unlawful, unfair, deceptive, or abusive acts or practices (UUDAAP). This UUDAAP standard is significant because it extends the DFPI's enforcement reach beyond specific statutory violations to encompass a broader range of conduct that the agency determines is harmful to consumers. A debt collection practice that does not technically violate the Debt Collection Licensing Act or the Rosenthal Fair Debt Collection Practices Act could still be challenged by the DFPI as unfair or abusive under the CCFPL.
Once licensed under the Debt Collection Licensing Act, debt collectors are not required to maintain a separate registration under the CCFPL. However, the CCFPL's substantive provisions — particularly its UUDAAP prohibition and the DFPI's investigative and enforcement authority — continue to apply to licensed debt collectors. Companies should understand that holding a debt collection license does not insulate them from CCFPL enforcement if their practices are found to violate the law's conduct standards. LOAA advises debt collection clients on the interplay between the Debt Collection Licensing Act and the CCFPL, helping them understand how both statutes shape their compliance obligations and regulatory exposure.
The Debt Collection Licensing Act's definition of debt collection activity is broad, but the statute does provide certain exemptions from the licensing requirement. Determining whether a particular company or business model falls within the scope of the licensing obligation — or qualifies for an exemption — is a threshold question that must be resolved before the company begins or continues collection activities involving California consumers.
A company that assumes it qualifies for an exemption without conducting a thorough legal analysis risks operating unlawfully, which can result in enforcement action, civil liability, and the voiding of collection agreements.
LOAA provides legal opinions to companies that need a legal analysis of whether their business model triggers the Debt Collection Licensing Act's licensing requirement or falls within an available exemption. These opinions involve a detailed examination of the company's activities, revenue model, customer and creditor relationships, and operational practices, measured against the statutory definitions, exemptions, and regulatory guidance issued by the DFPI. For companies that operate hybrid business models — combining debt collection with debt purchasing, loan servicing, or other financial services — the analysis may involve multiple licensing frameworks, and LOAA identifies all applicable requirements so the company can make informed compliance decisions.
The firm also advises companies that are restructuring their operations or entering the California market for the first time on the licensing implications of their planned activities. Obtaining a clear legal opinion before commencing operations can prevent costly regulatory missteps and provide a documented basis for the company's compliance posture in the event of a future DFPI inquiry.
The Debt Collection Licensing Act and the CCFPL do not exist in a vacuum. California debt collectors must also comply with the Rosenthal Fair Debt Collection Practices Act, California's state-level counterpart to the federal Fair Debt Collection Practices Act (FDCPA). LOAA advises debt collectors and debt buyers on compliance with this full body of state and federal law, helping clients develop collection practices, scripts, letters, and operational procedures that satisfy all applicable requirements. The firm drafts collection letters, validation notices, payment agreements, settlement agreements, and other documents that debt collectors use in their daily operations, ensuring that each document reflects current legal requirements and accounts for the specific types of debt the client collects.
Beyond the documents used in direct consumer communications, debt collectors and debt buyers require a range of contracts and compliance documents to govern their business relationships and satisfy regulatory requirements. Third-party debt collectors need client engagement agreements with the creditors whose accounts they collect, establishing the scope of the collection engagement, fee arrangements, data handling obligations, compliance responsibilities, and indemnification provisions. Debt buyers need purchase and sale agreements that address the transfer of account documentation, representations and warranties regarding the validity and enforceability of the purchased debts, and the allocation of compliance obligations between buyer and seller.
LOAA drafts these transactional documents in compliance with the Debt Collection Licensing Act, the CCFPL, the Rosenthal Act, and other applicable California and federal laws.
For debt buyers, the firm addresses the additional documentation requirements that arise from the purchase and resale of consumer debt portfolios. California law imposes specific requirements on debt buyers regarding the documentation they must possess before collecting on purchased accounts, the information they must provide to consumers upon request, and the records they must maintain throughout the collection process. LOAA ensures that debt buyer clients have the contractual provisions in place to satisfy these requirements from the point of portfolio acquisition through final collection or disposition.
Licensed debt collectors and debt buyers are subject to the DFPI's full range of supervisory and enforcement tools. The DFPI conducts examinations of licensed debt collectors, investigates consumer complaints and industry tips, and has authority to bring enforcement actions that may include citations, fines, cease and desist orders, license suspensions, license revocations, and referrals for criminal prosecution in cases involving willful violations or fraud. The CCFPL's UUDAAP standard gives the DFPI additional enforcement flexibility, allowing it to pursue actions based on unfair or abusive conduct even where no specific statutory provision has been violated.
LOAA represents debt collectors and debt buyers in all stages of DFPI enforcement proceedings, from the initial investigative inquiry through formal administrative hearings and judicial appeals. When a client receives notice of a DFPI investigation, examination findings, or a preliminary enforcement action, the firm works to assess the client's exposure, develop a response strategy, and engage with the DFPI in a manner designed to resolve the matter as favorably as possible.
When matters proceed to formal enforcement, the firm provides vigorous defense in administrative hearings before the Office of Administrative Hearings (OAH), challenging the DFPI's factual allegations, legal theories, and proposed penalties. LOAA also represents clients in appeals of adverse administrative decisions and in court proceedings where the DFPI seeks injunctive relief or other judicial remedies.
At the federal level, the CFPB exercises significant enforcement authority over debt collectors and debt buyers, and the bureau has been particularly active in bringing actions against companies engaged in practices it considers unfair, deceptive, or abusive. LOAA represents clients in CFPB investigations, responses to civil investigative demands, consent order negotiations, and contested enforcement proceedings. For companies that face simultaneous state and federal regulatory scrutiny, the firm provides coordinated defense that addresses both fronts and avoids the strategic missteps that can arise when state and federal responses are handled independently.
Disclaimer: The information on this page is provided for general informational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading this content. Every legal matter is unique, and you should consult directly with a qualified attorney regarding your specific circumstances.
"I engaged Alan to help me through the complexities of obtaining my Lenders License. He was very knowledgeable about the process and provided me with a high level of service.I worked quickly getting him all the information needed and he worked at my pace. He was responsive to e-mails and questions and followed up with the DFPI to make sure everything was filed correctly.I had read online that this process could take as long as 6 months however Alan completed the assignment in less than 3 I will be retaining his services in the future to ensure my company remains in compliance."
-Petroleum Realty Group Inc.
"I hired Alan to represent me as a mortgage broker before the California Department of Real Estate. I couldn't be more pleased with Alan's services from start to finish. Alan was clear and concise. Alan's communication throughout the process was professional. I received the results I hoped for. Thank you Alan. I'll definitely recommend you to ALL and use your services again in the future shall I need anything!"
-Anonymous
"Very helpful in assisting in obtaining an OCCC Texas Motor Vehicle Sales Finance License. Very knowledgeable in answering all questions the OCCC asked for on their questionnaire. Highly recommended and would re-hire for any future assistance regarding motor vehicle and finance business. God Bless!"
-Raul
