TITLE: California Department of Financial Protection and Innovation Invites Comments on Proposed Registration Rules for Financial Service Providers
BODY:
On November 17, 2021, the California Department of Financial Protection and Innovation (DFPI) issued an invitation for comments on proposed rulemaking under the California Consumer Financial Protection Law (CCFPL). Acting Commissioner Christopher S. Shultz announced the proposal to require registration for four industries providing financial products and services to California consumers: debt settlement services, student debt relief services, education financing, and wage-based advances.
The proposed rules would establish registration and reporting requirements for providers in these sectors, enabling the DFPI to conduct compliance examinations and detect emerging risks to California consumers. For education financing, the rules would cover all forms of credit intended to fund postsecondary education, including loans, retail installment contracts, and income share agreements, regardless of whether payment obligations are absolute, contingent, or fixed. The DFPI proposes differentiated reporting requirements for income-based education financing compared to fixed-payment education financing. For wage-based advances, the rules target providers commonly known as earned wage access providers. The DFPI notes that the registration requirements do not preclude the application of other existing laws or licensing requirements.
The DFPI seeks stakeholder input on streamlining the registration process, improving transparency, clarifying public disclosure rules, and enhancing annual reporting requirements. The department also invites comments on the economic impact of the proposed rules, including effects on business competitiveness, job creation, innovation incentives, and consumer welfare.
The comment period closes on December 20, 2021. Comments may be submitted electronically to regulations@dfpi.ca.gov with "PRO 01-21" in the subject line, or by mail to the DFPI Legal Division in Los Angeles. Questions can be directed to Charles Carriere, Senior Counsel for the Commissioner, at (415) 722-9655.