The October 2021 DFPI Bulletin focuses on new Consumer Financial Protection Legislation, proposed modifications to Responsible Small Dollar Loans Pilot Program, and escrow reports due, among other topics.

Editor’s note — The California Department of Financial Protection and Innovation (DFPI, formerly the Department of Business Oversight) supervises, licenses, and regulates a variety of financial institutions, including some real estate mortgage loan originators (MLOs) holding a Nationwide Multistate (or Mortgage) Licensing System and Registry (NMLS) license. Alongside the California Department of Real Estate (DRE), the DFPI shares the responsibility for overseeing MLOs depending on their license use.

Licensees, stay up-to-date on October 2021’s MLO news and events below.

 

Newsom signs Consumer Financial Protection Legislation

Earlier this month, Governor Newsom signed a package of consumer financial protection legislation to expand consumer rights and increase transparency. This legislation aims to protect Californians from scams and unscrupulous practices in financial services. The package includes:

  • SB 531, which allows consumers to request verification that collectors have the authority to collect a debt and prohibits a creditor from selling a consumer debt without timely notice;
  • AB 1177, which guarantees universal free banking access to all Californians without fees or penalties through the simultaneous creation of the CalAccount program created by this bill; and
  • AB 1405, which protects Californians from predatory debt settlement practices, ensuring providers disclose important information about the process to consumers.

Governor Newsom also signed into law AB 390 on automatic renewal and continuous subscription services, AB 1221 on consumer warranties and service contracts disclosures, and AB 1320 on money transmission customer service.

 

DFPI proposes modifications to Responsible Small Dollar Loans Pilot Program

On Aug. 6, 2021, 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 DFPI is accepting comments on this modification to the proposed Pilot Program regulations until October 21, 2021.

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.

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

 

Escrow Reports Due

For escrow agent licensees whose fiscal year ended on June 20, 2021, annual reports are due October 13, 2021. Submit reports by email to ESCAnnualReportFiling@dfpi.ca.gov or mail 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

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

The 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. 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.

 

Proposed Escrow Regulations Hearing

A public hearing will be held by the DFPI on Oct. 15 at 1:00 p.m. PST regarding modifications to 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. Learn more at the DFPI Escrow law rulemaking webpage.

 

New DFPI Filing Process for Securities and Franchises

The DFPI issued an order that changes how securities and franchise filings may be submitted to the DFPI to aid in compliance with accessibility requirements. Effective Nov. 1, 2021, all Corporate Securities Law (CSL) & Franchise Investment Law (FIL) filers need to:

  • file all documents through the DocQNet Portal;
  • use ADA Compliant CSL and FIL Exemption Notices;
  • certify that they are using the ADA Compliant Exemption Notices; and
  • file by 11:59 p.m. PST on due date (if the deadline falls on a weekend or holiday then the next business day by 11:59 p.m. PST.)

Fair Lending Notice Form

The DFPI has received requests for updates to the Fair Lending Notice in response to changes to the Department’s name and Sacramento address. Licensees should use the Department’s current name and address in the form:

California Department of Financial Protection and Innovation
Consumer Services Office
2101 Arena Boulevard
Sacramento, CA 95834

Phone: (866) 275-2677 or (916) 327-7585

A revised form with the Department’s current information is available here.

 

Free Veterans Day Resource Webinar

The DFPI is hosting a virtual resource webinar with presenters from the U.S. Department of Veteran Affairs (VA), CalVet and the Sacramento County Veteran’s Service Office in honor of Veterans Day.

This free webinar will take place online on Nov. 11, 2021, at 11 a.m. PST. It will highlight the many resources, financial education and other tools available to all California military service members and veterans.

If you count veterans among your clients, the DFPI encourages you to help them promote the event in your marketing. To learn more, share and register for this free webinar, please visit the DFPI’s official webpage.

 

That’s a wrap on the October 2021 DFPI Bulletin! Find out more about the topics mentioned here by reading the full bulletin on the DFPI website.