On May 20, the California DFPI released a Notice of Proposed Rulemaking seeking comment on implementing new rules to the California Consumer Financial Protection Law (CCFPL).
Previously, the CCFPL expanded the DFPI’s oversight authority to cover business activity it could not previously regulate including, but not limited to, debt collection, debt settlement, credit repair, check cashing, rent-to-own contracts, retail sales financing, consumer credit reporting, and lead generation. This new rule would allow the DFPI to establish reasonable procedures for covered persons to provide a timely response to consumers regarding complaints and inquiries aiming to protect consumers by ensuring covered persons have written policies and procedures in place regarding the handling of complaints and inquiries.
Specifically, the new rules would establish procedures for: responding to consumer complaints, initiating consumer complaints, the acknowledgment of receipt of complaints, the review and evaluation of complaints, the tracking of complaints, the response to complaints, the maintenance of a written record for each complaint, the administration of the complaint process without discrimination, and the reporting of complaints to the DFPI.
Comments are due by July 5.
Putting It Into Practice: The California Legislature intended for the CCFPL to protect consumers from discrimination and unfair, deceptive, and abusive acts and practices by covered persons in connection with financial products and services. This new rule aims to implement that intent by expanding the ability of the DFPI to improve accountability and transparency of financial services providers.
If implemented, this new rule would finally require covered persons to promptly respond to complaints and inquiries by responding to the issues raised by consumers and it would allow the DFPI to bring enforcement actions in violation of the proposed rule.