On June 17, the California DFPI proposed to amend the California Code of Regulations relating to requirements under the Debt Collection Licensing Act (DCLA) and will be accepting comments through July 3. The proposed amendments would define the phrase "net proceeds generated by California debtor accounts" and also clarify annual reporting requirements for DCLA licensees.

Specifically, “net proceeds generated by California debtor accounts” will mean the amount retained by a debt collector from its California debt collection activity, and depending on the business activities of the licensee, will be further defined as follows: (i) for debt buyers, net proceeds are the amount collected minus the prorated purchase price paid for the debt, before deducting costs and expenses; (ii) for purchasers of non-charged-off or non-defaulted debt, net proceeds are calculated in the same fashion as debt buyers; and (iii) for all other debt collectors, net proceeds are the amount the collector receives from its clients, before deducting costs and expenses (where “client” means the company on whose behalf the debt collector has been contracted to collect on an account).

The proposed regulations also clarified annual reporting requirements and defined terms used within the report for DCLA licensees. Specifically, the regulations confirmed that licensees must submit an annual report, signed by a principal officer attesting to its accuracy and completeness, and that the report must be submitted electronically. Additionally, when completing the data requested in the report, licensees must count each California debtor account separately and the number of California debtor accounts collected in the preceding year (which is defined as the calendar year – January 1 through December 31) shall be the sum of (i) the total number of accounts collected in full; (ii) the total number of accounts resolved for less than the full amount; and (iii) the total number of accounts where partial payments were made but a balance remains due. The report must also include the total number and dollar amount of accounts for which collection was attempted but no payments were collected or resolved within the year.

The “total dollar amount of California debtor accounts purchased in the preceding year” and the “face value dollar amount of California debtor accounts in the licensee’s portfolio in the preceding year” were defined and must also be reported, excluding any added fees or charges. Additional information required includes the number of California debtor accounts and the number of California debtors in the licensee's portfolio as of the end of the year.