(a)Subject to subdivision (c), the commissioner shall examine the affairs of each licensee for compliance with this division. The commissioner shall appoint suitable persons to perform the examination. The commissioner and their appointees may examine the books, records, and documents of the licensee, and may examine the licensees officers, directors, employees, or agents under oath regarding the licensees debt collection operations.

(b)The commissioner may cooperate with any agency of the state, the federal government, or other states in performing license examinations.

(c)(1)Unless an onsite examination is considered necessary for the protection of the public, the commissioner shall conduct all examinations without a site visit to the business office of a licensee through the use of video technology by requesting that licensees submit required books and records to the department electronically, via a secure portal.

(2)For purposes of paragraph (1), the commissioner may determine that an onsite examination is necessary for the protection of the public when any of the following conditions is met:

(A)There is a court-adjudicated violation of Title 1.6C (commencing with Section 1788) of Part 4 of Division 3 of the Civil Code.

(B)There is a court-adjudicated violation of Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code.

(C)The licensee has had a debt collector license in another state suspended or revoked.

(D)There is a concern identified during a remote examination.

(3)(A)The commissioner shall adopt regulations determining the frequency of examinations required pursuant to this section.

(B)The commissioner may reduce the frequency or scope of an examination if the commissioner can obtain the results of a recent independent third-party audit or examination of the licensee that the commissioner finds to be of suitable quality and reliability, which may include, but is not limited to, any of the following:

(i)An audit or examination conducted by another state that licenses debt collectors.

(ii)An audit or examination conducted by the federal Consumer Financial Protection Bureau.

(iii)An independent third-party audit or examination done in connection with a program administered by a nonprofit trade association that maintains rigorous compliance standards, as determined by the commissioner.

(d)Unless otherwise exempt pursuant to Section 100001, affiliates of a licensee are subject to examination by the commissioner on the same terms as the licensee, but only when reports from, or examination of, a licensee provides documented evidence of unlawful activity between a licensee and affiliate benefitting, affecting, or arising from the activities regulated by this division.

(e)The cost of each examination of a licensee shall be paid to the commissioner by the licensee examined, and the commissioner may maintain an action for the recovery of the cost in any court of competent jurisdiction. In determining the cost of the examination, the commissioner may use the estimated average hourly cost for all persons performing examinations of licensees or other persons subject to this division for the fiscal year.

(f)The statement of the findings of an examination shall belong to the commissioner and shall not be disclosed to anyone other than the licensee, law enforcement officials, or other state or federal regulatory agencies for further investigation and enforcement. Reports required of licensees by the commissioner under this division and results of examinations performed by the commissioner under this division are the property of the commissioner.

(g)The commissioner shall provide a written statement of the findings of the examination, issue a copy of that statement to the licensee licensee, and take appropriate steps to ensure correction of any violations of this division.

(h)Notwithstanding any provision of this division, the commissioner shall conduct an examination at each location operated by a licensee unless the operations are centralized or there are other factors acceptable to the commissioner.

(i)In any proceeding under this division, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

(a)There is within the Department of Financial Protection and Innovation, a Debt Collection Advisory Board.

(b)(1)The Debt Collection Advisory Board shall advise the commissioner on matters relating to debt collection or the debt collection industry, including proposed fee schedules and the mechanics and feasibility of implementing requirements to be proposed in regulations.

(2)Unless engaging in emergency rulemaking, the commissioner shall request the advice of the Debt Collection Advisory Board before the initial publication or adoption of fee schedules or a proposed regulation.

(c)The Debt Collection Advisory Board shall consist of seven members; one of whom shall represent consumers.

(1)The members of the Debt Collection Advisory Board shall be appointed by the commissioner.

(2)The term of a member of the Debt Collection Advisory Board shall be two years. However, a member may be reappointed.

(3)Membership in the Debt Collection Advisory Board shall be voluntary. No person shall be required to accept an appointment to the Debt Collection Advisory Board, and any member may resign at any time by filing a resignation with the commissioner.

(4)No member of the Debt Collection Advisory Board shall receive any compensation, reimbursement for expenses, or other payment from the state in connection with service on the Debt Collection Advisory Board.

(d)The Debt Collection Advisory Board shall meet at least twice each calendar year.

(e)The commissioner may, by order or regulation, prescribe rules governing the Debt Collection Advisory Board and its members, including, but not limited to, matters relating to meetings, quorum, and actions.

(f)The Debt Collection Advisory Board is not subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).

This division shall be known, and may be cited, as the Debt Collection Collector Licensing Act.

No A county, city, or other political subdivision within this state shall not require a debt collector to be licensed or to register as a debt collector.

(2)For purposes of debt collection in this state without first obtaining a license pursuant paragraph (1), to this division. To the extent permitted by federal law, a person is acting in this state if the person is located in this state and is seeking to collect from a debtor that resides inside or outside the state, or is located outside of the state and is seeking to collect from a debtor that resides in this state. A license shall be obtained for the licensees principal place of business and shall not be transferred or assigned. A separate license is not required for each individual branch office.

(F)A trustee performing acts in connection with a nonjudicial foreclosure pursuant to Article 1 (commencing with Section 2920) of Chapter 2 of Title 14 of Part 4 of Division 3 of the Civil Code.

(2)The commissioner may use the authority described in Section 100005 in connection with a court-adjudicated violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code by a person described in paragraph (1).

(2)The collection regulated pursuant to Division 12.5 (commencing with Section 28100) or to the collection of covered commercial debt or covered commercial credit, as those terms are defined in Title 1.6C (commencing with Section 1788) 1788.2 of Part 4 of Division 3 of the Civil Code.

For purposes of this division, the following terms have the following meanings:

(a)Applicant means a person, including a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other entity, who applied for a license pursuant to this division.

(b)California debtor accounts means accounts that are owned by consumers who reside in California at the time that the consumer makes a payment on the account.

(c)Commissioner means the Commissioner of Financial Protection and Innovation.

(d)Consumer credit transaction means a transaction between a natural person and another person in which property, services, or money is acquired on credit by that natural person from the other person primarily for personal, family, or household purposes.

(e)Consumer debt or consumer credit means money, property, or their equivalent, due or owing, or alleged to be due or owing, from a natural person by reason of a consumer credit transaction. The term consumer debt includes a mortgage debt. The term consumer debt includes charged-off consumer debt as defined in Section 1788.50 of the Civil Code.

(f)Creditor means a person who extends consumer credit to a debtor.

(g)Debt means money, property, or their equivalent that is due or owning or alleged to be due or owing from a natural person to another person.

(h)Debt collection means any act or practice in connection with the collection of consumer debt.

(i)Debt collector means any person who, in the ordinary course of business, regularly, on the persons own behalf or on behalf of others, engages in debt collection. The term includes any person who composes and sells, or offers to compose and sell, forms, letters and other collection media used or intended to be used for debt collection. The term debt collector includes debt buyer as defined in Section 1788.50 of the Civil Code.

(j)Debtor means a natural person from whom a debt collector seeks to collect a consumer debt that is due or owing or alleged to be due or owing from the person.

(k)Department means the Department of Financial Protection and Innovation.

(l)Fund means the Debt Collection Licensing Fund established pursuant to Section 100006.5.

(m)Licensee means a person licensed, conditionally or unconditionally, pursuant to this chapter.

(n)Nationwide Multistate Licensing System & Registry means a system of record, created by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, for nondepository, financial services licensing or registration in participating state agencies, the District of Columbia, Puerto Rico, the United States Virgin Islands, and Guam.

(o)Person means a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other similar entity.

(a)The commissioner shall administer this division and may adopt rules and regulations, and issue orders, consistent with that authority.

(b)Without limitation, the functions, powers, and duties of the commissioner include all of the following:

(1)To issue or to refuse to issue a license as provided in this division.

(2)To allow affiliated companies to be under a single license. The commissioner shall adopt regulations specifying what constitutes an affiliated company for these purposes.

(3)To revoke or suspend any license for a violation of this division or a court-adjudicated violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code.

(4)To keep records of licenses issued under this division.

(5)To receive, consider, investigate, and act upon a complaint made in connection with a licensee.

(6)To prescribe the form of and to receive applications for licenses and reports, books, and records required to be made or retained by a licensee.

(7)To subpoena documents and witnesses, and to compel their attendance and production, to administer oaths, and to require the production of books, papers, or other materials relevant to any inquiry authorized by this division.

(8)To require information with regard to an applicant that the commissioner may deem necessary, with regard for the paramount public interest in ascertaining the experience, background, honesty, truthfulness, integrity, and competency of an applicant for collecting consumer debt, and if an applicant is an entity other than an individual, in ascertaining the honesty, truthfulness, integrity, and competency of officers, directors, or managing members of the corporation, association, or other entity, or the general patters of a partnership.

(9)To enforce by order any provision of this division.

(10)To levy fees, fines, and charges in an amount sufficient to cover the cost of the services performed in administering this division. The fees collected pursuant to this division shall not exceed the costs of administering this division.

(a)Notwithstanding any law the commissioner shall have the authority to conduct investigations and examinations of an applicant or licensee as follows:

(1)For purposes of determining whether an applicant is eligible for a license, or that a licensee is complying with the provisions of this division or any regulation or order of the commissioner, the commissioner may access, receive, and use any books, accounts, records, files, documents, information, or evidence that relates to debt collection, including, but not limited to, any of the following relating to the intent to, or the practice of, collecting consumer debt:

(A)Criminal, civil, and administrative history information.

(B)Personal history and experience information, including, but not limited to, independent credit reports obtained from a consumer reporting agency.

(C)Any other documents, information, or evidence that the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of those documents, information, or evidence.

(2)For the purposes of investigating violations or complaints arising under this division, the commissioner may direct, subpoena, or order the attendance of, and examine under oath, any person whose testimony may be required about the consumer debt or account of the debtor.

(b)In making any examination or investigation authorized by this section, the commissioner may control access to any documents and records of the licensee or person under examination or investigation. The commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no a person shall not remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the documents or records of a licensee have been, or are at risk of being, altered or destroyed for purposes of concealing a violation of this division, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct their ordinary business affairs.

(c)The commissioner may permit affiliated companies to be subject to a single examination. The department shall list all affiliated company names on the license and shall post them on the departments internet website.

(a)If, in the opinion of the commissioner, a person who is required to be licensed under this division is engaged in business operating as a debt collector without a license from the commissioner, or a person or licensee has violated any provision of this division, an order, or a regulation adopted pursuant to this division, or Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, the commissioner may do any of the following:

(1)After notice and an opportunity for a hearing, order the person or licensee to desist and to refrain from engaging in the business of further continuing the violation.

(2)After notice and an opportunity for a hearing, order the person or licensee to pay ancillary relief. The ancillary relief may include, but need not be limited to, refunds, restitution, disgorgement, and payment of damages, as appropriate, on behalf of a person injured by the conduct or practice that constitutes the subject matter of the assessment. A person or licensee may dispute an order to pay ancillary relief for an individual violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, if the same injured person brought an action for the same violation against the same person or licensee in court, the action resulted in a final judgment on the merits, and all damages, penalties, or fees have been paid to the injured person.

(b)If, in the opinion of the commissioner, a depository institution, as defined in Section 1420, a person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000), or a person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, has violated Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, the commissioner may take the actions described in paragraphs (1) and (2) of subdivision (a).

(c)If, within 30 days after an order issued pursuant to subdivision (a) or (b) is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order shall be deemed rescinded.

An applicant shall apply for a license by submitting all both of the following to the commissioner:

(a)A completed application for a license in a form prescribed by the commissioner and signed under penalty of perjury. An application shall include the location of the applicants principal place of business and all branch office locations.

(b)(1)An application fee, of three hundred fifty one thousand dollars ($350), ($1,000), and an investigation fee, the amount of which shall be determined by the department, to cover any costs incurred in processing an application, including a fingerprint processing and criminal history record check under Section 100009. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn.

(2)The fees assessed pursuant to this subdivision shall be billed and collected by the commissioner at the time of initial application.

(a)A licensee shall notify the commissioner, in writing, of any change in the information provided in the application for a license, as applicable, not later than 30 days after the occurrence of the event that results in the information becoming inaccurate or incomplete.

(b)(1)If a licensee seeks to change its place of business to a street address other than that designated in its license, the licensee shall provide written notice to the commissioner at least 10 days prior to the change.

(2)A licensee shall not engage in the business of operate as a debt collection collector at a new location in a name other than a name approved by the commissioner.

(3)A licensee that opens a new branch office or changes the location of an existing branch office shall notify the commissioner in writing of the new or changed branch office location within 30 days after the branch office begins business.

(a)(1)Each licensee shall pay to the commissioner its an annual pro rata share of fee for all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the division in the year in which the annual fee is levied. The division by December 31 of each year, as determined pursuant to paragraph (2).

(2)(A)Subject to subparagraph (B), the annual pro rata share shall be based upon the proportion of net proceeds generated by California debtor accounts in the preceding year after the amount levied pursuant to subdivision (c). be divided into three tiers based on the total number of California debtor accounts in active collection in the preceding year, as follows:

(b) On or before September 30 in each year, the commissioner shall notify each licensee of the amount of the annual fee schedule that will take effect on January 1. If payment is not made by January 1, December 31, the commissioner shall assess and collect a penalty, in addition to the fee, of 1 5 percent of the assessment for each month or part of a month that the payment is delayed or withheld.

(c)In the levying and collection Annual fees are independent of the annual fees, a licensee shall neither be charged for nor be permitted to pay less than two hundred fifty dollars ($250) nor more than an aggregate of all reasonable costs to operate this division, with the exception of fees associated with investigations and examinations.

(d)If a licensee fails to pay the annual fees on or before January 1, December 31, the commissioner may by order summarily suspend or revoke the license issued to the licensee. licensee within 30 days. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when the license is revoked or suspended, a licensee shall not engage in the business of collecting operate as a debt collector in this state pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division.

(e)Notwithstanding subdivisions (a) to (d), inclusive, the commissioner may by rule require licensees to pay annual fees through the Nationwide Multistate Licensing System & Registry.

(a)A licensee shall file an annual report with the commissioner, on or before March 15, that contains all relevant information that the commissioner reasonably requires concerning the business and operations conducted by the licensee in the state during the preceding calendar year, including information regarding collection activity. The report shall, at minimum, require disclosure of all of the following information:

(1)The total number of California debtor accounts purchased or collected on in in active collections in the preceding year.

(2)Whether or not the licensee is acting as a debt collector, debt buyer, or both.

(3)The case number of any action in which the licensee was held liable by final judgment under Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code.

(b)The individual annual reports filed pursuant to this section shall be made available to the public for inspection.

(c)The report shall be made under oath and in the form prescribed by the commissioner.

(d)A licensee shall make other special reports that may be required by the commissioner.

(a)As often as Subject to subdivision (c), the commissioner deems necessary and appropriate, the commissioner shall examine the affairs of each licensee for compliance with this division. The commissioner shall appoint suitable persons to perform the examination. The commissioner and their appointees may examine the books, records, and documents of the licensee, and may examine the licensees officers, directors, employees, or agents under oath regarding the licensees debt collection operations.

(b)The commissioner may cooperate with any agency of the state, the federal government, or other states in performing license examinations.

(c)This section does not require the commissioner to conduct examinations at the business offices of licensees. (1)Unless an onsite examination is considered necessary for the protection of the public, the commissioner may shall conduct some or all examinations without a site visit to the business office of a licensee, licensee through the use of video technology by requesting that licensees submit required books and records to the department electronically, via a secure portal.

(d)Unless otherwise exempt pursuant to Section 100001, affiliates of a licensee are subject to examination by the commissioner on the same terms as the licensee, but only when reports from, or examination of, a licensee provides documented evidence of unlawful activity between a licensee and affiliate benefitting, affecting, or arising from the activities regulated by this division.

(e)The cost of each examination of a licensee shall be paid to the commissioner by the licensee examined, and the commissioner may maintain an action for the recovery of the cost in any court of competent jurisdiction. In determining the cost of the examination, the commissioner may use the estimated average hourly cost for all persons performing examinations of licensees or other persons subject to this division for the fiscal year.

(f)The statement of the findings of an examination shall belong to the commissioner and shall not be disclosed to anyone other than the licensee, law enforcement officials, or other state or federal regulatory agencies for further investigation and enforcement. Reports required of licensees by the commissioner under this division and results of examinations performed by the commissioner under this division are the property of the commissioner.

(g)The commissioner shall provide a written statement of the findings of the examination, issue a copy of that statement to the licensee and take appropriate steps to ensure correction of any violations of this division.

(h)Notwithstanding any provision of this division, the commissioner shall have the authority to waive one or more branch office examinations, if the commissioner deems that the branch office examinations conduct an examination at each location operated by a licensee unless the operations are not necessary for the protection of the public, due to the centralized operations of the licensee or or there are other factors acceptable to the commissioner.

(i)In any proceeding under this division, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

(a)There is within the Department of Financial Protection and Innovation, a Debt Collection Advisory Committee. Board.

(b)(1)The Debt Collection Advisory Committee Board shall advise the commissioner on matters relating to debt collection or the debt collection business, industry, including proposed fee schedules and the mechanics and feasibility of implementing requirements to be proposed in regulations.

(c)The Debt Collection Advisory Committee Board shall consist of seven members; one of whom shall represent consumers.

(1)The members of the Debt Collection Advisory Committee Board shall be appointed by the commissioner.

(2)The term of a member of the Debt Collection Advisory Committee Board shall be two years. However, a member may be reappointed.

(3)Membership in the Debt Collection Advisory Committee Board shall be voluntary. No person shall be required to accept an appointment to the Debt Collection Advisory Committee, Board, and any member may resign at any time by filing a resignation with the commissioner.

(4)No member of the Debt Collection Advisory Committee Board shall receive any compensation, reimbursement for expenses, or other payment from the state in connection with service on the Debt Collection Advisory Committee. Board.

(d)The Debt Collection Advisory Committee Board shall meet at least twice each calendar year.

(e)The commissioner may, by order or regulation, prescribe rules governing the Debt Collection Advisory Committee Board and its members, including, but not limited to, matters relating to meetings, quorum, and actions.

(a)(1)The commissioner may at any time investigate into the affairs and examine the books, accounts, records, files, and any office within inside or outside of this state used in the business of every credit union, whether it acts or claims to act under or without authority of this division.

(2)The commissioner and the commissioners duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a credit union referred to in paragraph (1).

(3)The officers and employees of a credit union being examined shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.

(b)(1)The commissioner shall examine every credit union organized under the laws of this state to the extent and whenever and as often as the commissioner shall deem it advisable but in no case less than once every two years.

(2)For purposes of this subdivision, an examination made by the commissioner in conjunction with or with assistance from the National Credit Union Administration or a credit union regulatory agency of another state of the United States is deemed to be an examination made by the commissioner.

(3)For purposes of this subdivision, an examination made by the National Credit Union Administration pursuant to an alternating examination schedule approved by both the commissioner and the National Credit Union Administration is deemed to be an examination made by the commissioner.

(4)This subdivision does not require the commissioner to make an examination onsite at the offices of a credit union.