Gov. Gavin Newsom signed a package of consumer financial protection legislation earlier this month that will expand consumer rights and increase transparency, protecting Californians from scams and unscrupulous practices in automatic renewal subscriptions, debt settlement and collection practices, and other financial services.

• AB 1405 by Assemblymember Buffy Wicks (D-Oakland) protects Californians from predatory debt settlement practices, ensuring providers disclose important information about the process to consumers. Under the legislation, customers who enroll in a debt settlement plan will have a three-day window to review the disclosures before the contract takes effect.
• SB 531 by Senator Bob Wieckowski (D-Fremont) allows consumers to request verification that collectors have the authority to collect a debt and prohibits a creditor from selling a consumer debt unless notice has been provided to the debtor at least 30 days before selling the debt.

Adam Wright has joined the DFPI Office of Financial Technology Innovation (OFTI) and will help further the OFTI’s mission to create a national model of consumer protection that fosters responsible innovation.

Prior to joining OFTI, Adam served for 8 years in the DFPI’s Enforcement Division. In that role, Adam litigated administrative and civil cases, ran investigations, and advised the DFPI's licensing, examination, and executive teams on policy and strategy. Adam’s enforcement practice concentrated in lending, FinTech, and other consumer financial products and services brought under the Department’s jurisdiction by the recent California Consumer Financial Protection Law.

Other new staffing includes:

• Lisa Medina has joined the Consumer Financial Protection Division as a Financial Institutions Manager for the Debt Collector Licensing Program.
• Eunju Chagolla has joined the Consumer Financial Protection Division as a Financial Institutions Manager for the Debt Collector Licensing Program.
• Dulce Medina, PhD, has joined the Consumer Financial Protection Division as Research Data Manager.
• Colleen Monahan has been promoted to Assistant Chief Counsel for the DFPI.

Some Escrow Reports Due Oct. 13

Each escrow agent licensee is required to submit to the Commissioner of the DFPI an annual report prepared by an independent certified public accountant or an independent public accountant (Financial Code section 17406) within 105 days after the close of the escrow agent’s fiscal year. The annual report includes audited financial statements and required supplemental information.

If your fiscal year ended on June 30, 2021, your annual report is due Oct. 13, 2021. Please have your CPA email your report to ESCAnnualReportFiling@dfpi.ca.gov by Oct. 13 using a secured, encrypted delivery system. The use of a secured dropbox is also acceptable. If your CPA is unable to submit the annual report electronically, it can be mailed to Sultanna Wan, Senior Financial Institutions Examiner, Escrow Law, Department of Financial Protection and Innovation, 320 West Fourth Street, Suite 750, Los Angeles, CA 90013.

Penalties for failure to file the annual report by the due date or to include required information are $100 per day for the first five days a report is late and $500 per day thereafter (Financial Code section 17408). Failure to file a report or to include any required information may also result in the suspension or revocation of an escrow agent’s license and/or prompt an immediate examination (Financial Code section 17602.5).

For questions about the annual reports, call Sultanna Wan at (213) 576-7647.

Hearing for Proposed Escrow Regulations

In response to a hearing request by an interested party, a public hearing will be held on Oct. 15 at 1:00 p.m. PT to give interested persons an opportunity to express their views regarding the modifications to the proposed regulations under the Escrow Law. Testimony may be provided on the modifications to the originally proposed text made available on Aug. 27, 2021. The hearing will be held via  Zoom.

More details may be viewed at the DFPI Escrow law rulemaking webpage.

To aid in compliance with accessibility requirements, the DFPI issued an Order that changes how securities and franchise filings may be submitted to the DFPI. Effective Nov. 1, all CSL & FIL filers must:

1. File all documents through the DocQNet Portal (https://docqnet.dfpi.ca.gov/);
2. Use ADA Compliant CSL and FIL Exemption Notices (available on the DFPI Forms webpage);
3. Certify that they are using the ADA Compliant Exemption Notices (check the box at time of upload);
4. File by 11:59 p.m. PT on due date or if the deadline falls on a weekend or holiday then the next business day by 11:59 p.m. PT.

DFPI Rulemaking for Increased Access to Responsible Small Dollar Loans Pilot Program

The DFPI is seeking comments on modifications to the proposed Pilot Program regulations.

On Aug. 6, the DFPI published a Notice of Proposed Rulemaking to implement revisions to the Pilot Program for Increased Access to Responsible Small Dollar Loans, whose sunset date has been extended until Jan. 1, 2028. The Pilot Program was established under the California Financing Law (CFL) and is administered by the Department.

The Acting Commissioner is proposing a modification to the proposed regulations. The last day to submit comments is Thursday, Oct. 21.

The proposed changes to the rules will not be effective until approved by the Office of Administrative Law and filed with the Secretary of State in accordance with Government Code Section 11349.3.

Questions regarding the content of this notice may be directed to David.Bae@dfpi.ca.gov.

Annual Ombuds Day

The fourth annual Ombuds Day is Oct. 14. In 2018, the American Bar Association Section of Dispute Resolution declared the second Thursday of October Ombuds Day to recognize the ombuds profession, which has existed for centuries yet remains relatively unknown and underutilized.

The 2021 theme is Ombuds: Exploring Options to Resolve Conflict Together.
The primary goal of Ombuds Day is to improve public awareness of ombuds. Learn more about the various roles of Ombuds at OmbudsDay.com.

Earlier this year, the DFPI established the Office of the Ombuds to act as an independent, impartial, and confidential resource to ensure complaints about DFPI staff or actions receive full and impartial review. Brian Gould was selected in May to head the DFPI Office of the Ombuds.