Debt collection agencies: licensure and regulation.

Existing state and federal law defines and regulates debt collectors. Existing law prohibits a debt collector from attempting to collect a debt by means of various false representations. Existing law, the Collateral Recovery Act, licenses and regulates the activities of repossession agencies. Existing law defines a repossession agency as any person who engages in business or accepts employment to locate or recover collateral, whether voluntarily or involuntarily, for consideration. This bill would authorize the Commissioner of Business Oversight to license and regulate collection agencies. The bill would define a "collection agency" as a business entity through which a debt collector or association of debt collectors engage in debt collection. The bill would prohibit a collection agency from engaging in the business of debt collection, directly or indirectly, without first obtaining a license, which would not be transferable or assignable. The bill would except from this requirement a financial institution that collects its own debt in its own name. The bill would prescribe various informational requirements for a collection agency license application and require that an applicant, for purposes of licensure, maintain at least one office in the state that is open to the public during normal business hours, staffed by at least one full-time employee with access to specified records, and which accepts consumer payments made at that location. The bill would require a collection agency license to be renewed annually. The bill would authorize the Commissioner of Business Oversight to promulgate rules and regulations and issue orders consistent with its authority to administer the bill's provisions and would prescribe a nonexclusive list of the functions, powers, and duties of the commissioner. The bill would specifically grant the commissioner the authority to conduct investigations and examinations of applicants and licensees and, in this regard, to access, receive, and use any books, accounts, and records relating to the intent to engage in, or the practice of, collecting consumer debt and to obtain criminal history information and independent consumer credit reports. For the purposes of investigating violations or complaints, the bill would authorize the commissioner to direct, subpoena, or order the attendance of, and examine under oath, any person whose testimony may be required about the debt or account of the consumer. By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.