SHARE

December 31, 2021

CA DFPI provides assurance of no action to debt collection license applicants experiencing NMLS delays

You've Reached Your
Free Article Limit This Month
Subscribe now to get unlimited access to all Law.com OnPractice content. Your subscription is free.
Subscribe Now

The California Department of Financial Protection and Innovation (DFPI) has published a notice on its website concerning delays that debt collectors and buyers seeking to comply with the new licensing requirement in the state's Debt Collection Licensing Act are currently experiencing.

The new law, passed in September 2020, requires debt collectors and buyers to apply for a DFPI license by December 31, 2021.  It allows a debt collector or buyer that submits an application by that date to continue to operate pending the approval or denial of the application.  However, if a debt collector or buyer applies for a license after December 31, it cannot operate in California until its license has been issued.  Moreover, the DFPI has previously stated that it can take legal action against persons that continue operating without having submitted an application.  Applications must be submitted via the Nationwide Multistate Licensing System and Registry (NMLS).

In its notice, the DFPI states that it is aware that there has been a temporary slowdown in obtaining a new NLMS account and that "[w]ith various DFPI year-end deadlines, the NMLS team is experiencing an unprecedented volume of account requests."  The DFPI "acknowledges the predicament this puts entities in who are trying to comply with the new debt collector licensing requirement to apply for a license by Dec. 31, 2021" and states that it "would like to assure you that DFPI is aware of this issue and will not take any action against a debt collector solely on the basis of the temporary slowdown with NMLS." (emphasis in original).

It is important to note that the DFPI's no-action assurance is limited to debt buyers and applicants who attempt to apply for a license by December 31 but are unable to obtain a new NMLS account by December 31.  The DFPI states in the notice that it is "working cooperatively with the NMLS team to be able to verify those that have attempted to apply."

Debt collectors and buyers expecting to do business in California, and who have not yet submitted an NMLS application, can do so here.

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

More From Ballard Spahr

Federal Regulation for Digital Assets Could Be Coming Soon

By Scott L. Diamond Ballard Spahr July 22 , 2022

Significant federal regulation may be coming soon for cryptocurrencies, blockchain, and non-fungible tokens (NFTs).

Closing the Gate: House Adopts ENABLERS Act Amendment to 2023 NDAA

By Peter D. Hardy Ballard Spahr July 21 , 2022

Amendment Focuses on Professional “Gatekeepers” – Lawyers, Accountants, Payment Processors, and Those Providing Corporate Formation and Trust Services

Pennsylvania Cuts Corporate Income Tax Rates, Makes Other Significant Tax Changes

By Wendi L. Kotzen Ballard Spahr July 19 , 2022

Pennsylvania’s budget season just ended and Act 53 of 2022 (Act 53), made many significant changes to the Commonwealth’s business and individual taxes.

More From Creditors’ and Debtors’ Rights

Massachusetts Enacts CROWN Act, Prohibiting Discrimination Against Protective Hairstyles

By Samia M. Kirmani Jackson Lewis P.C. August 04 , 2022

Employers should review their policies, handbooks, and training materials to ensure compliance with the new law.

Bristol-Myers Decision Applies to Plaintiffs in FLSA Collective Actions, Third Circuit Holds

By David R. Golder Jackson Lewis P.C. August 02 , 2022

Joining two other circuits, the U.S. Court of Appeals for the Third Circuit has held that Bristol-Myers does apply to FLSA collective actions, and therefore, federal courts may not exercise jurisdiction over claims of out-of-state opt-in plaintiffs in putative collective actions, other than in the states in which the employer has its principal place of business or is incorporated.

Discrimination Based on Sexual Orientation Unlawful, Michigan High Court Holds, Overruling Precedent

By Marlo Johnson Roebuck Jackson Lewis P.C. August 01 , 2022

This opinion, with two justices dissenting, comes approximately two years after the U.S. Supreme Court ruling in Bostock v. Clayton County, 140 S. Ct. 1731 (2020), which held that Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment based on sexual orientation and gender identity.

Featured Stories
Closeclose
Search
Menu

Working...