March 2025 Debt License Updates

https://cornerstonelicensing.com/resources/newsletter-march-2025/

https://mortgage.nationwidelicensingsystem.org/slr/SitePages/default.aspx

CA FINALIZES DEBT COLLECTION LICENSING REGULATIONS

The California Department of Financial Protection and Innovation (DFPI) has finalized regulations under the Debt Collection Licensing Act (DCLA), which take effect on July 1, 2025. The regulations clarify licensing and reporting requirements for debt collectors operating in California. Debt collectors must be licensed by the DFPI, submit annual reports, and pay a pro rata assessment based on net proceeds from California debtor accounts. The final rules define how to calculate net proceeds for debt buyers, debt owners, and third-party debt collectors. Licensees must also report the total number of debtor accounts collected, attempted but unpaid, and held at year-end.ms. 

California Licensing Requirements – 

https://mortgage.nationwidelicensingsystem.org/slr/SitePages/CAAgencies.aspx

NC FINALIZES DEBT COLLECTION LICENSING REGULATIONS

ANorth Carolina has introduced Senate Bill 491, known as the Debt Settlement Services Act. If enacted, this legislation would mandate that individuals or entities offering debt settlement services obtain a license from the Commissioner of Banks, with certain exemptions for banks, credit unions, and specific nonprofit organizations. Applicants must demonstrate financial responsibility and notify the Commissioner within 20 days if they cease operations. Additionally, acquiring more than a 25% ownership stake in a licensed entity would require prior approval from the Commissioner. Licensees would be obligated to submit annual reports detailing metrics such as the number and status of enrolled debts, total debt amounts managed, and settlement outcomes. Fee structures under the proposed act would allow charges up to 15% of the principal or 20% of the difference between the original debt amount and the settlement amount. The act also includes provisions against false advertising and outlines civil penalties up to $1,000 per violation, with enforcement authority granted to the Attorney General. If passed, the act would take effect on January 1, 2026.

North Carolina Licensing Requirements:
https://mortgage.nationwidelicensingsystem.org/slr/SitePages/DynamicLicenses.aspx?StateID=NC