On August 31, 2022, the California Senate voted to approve House Assembly Bill 156, and sent the bill to Governor Newsom for consideration and potential signature.  If it becomes law, the bill would amend the existing California Debt Collection Act (the “DCLA”) in three ways.

First, the bill would amend provisions of Cal. Fin. Code § 100000.5(a) to “allow any debt collector that submits an application before January 1, 2023, to operate pending the approval or denial of the application.”  The existing grace period provided by the DCLA had previously only covered applications that were submitted prior to January 1, 2022.

Second, an amendment to Cal. Fin. Code § 100000.5(b) would provide the California Department of Financial Protect & Innovation (the “DFPI”) the authority to issue conditional licenses to applicants (valid for a period up to ninety days) pending the receipt and review of fingerprint images and related information.  As the legislative counsel’s digest accompanying the bill’s text states: “[t]he DCLA requires the Department of Justice to transmit fingerprint images and related information received from the DFPI to the Federal Bureau of Investigation for the purpose of obtaining a federal criminal history records check and requires the Department of Justice to review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner.”  The ability to issue conditional licenses during this time would provide the DFPI with flexibility during this portion of the application process.

Third, the bill would amend sections of Cal. Fin. Code § 100013 to provide the DFPI with discretion as to whether or not to deem an application abandoned in a situation where an applicant fails to submit responsive information within 60 days from a written request for information by the DFPI.  Currently, the DCLA mandates that any such application be abandoned.

There is no express timeline for the Governor to sign House Assembly Bill 156 into law.  All new applications for a license under the DCLA or for branch registrations are handled via the Nationwide Multistate Licensing System and Registry.

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