Current through Register 2024 Notice Reg. No. 38, September 20, 2024
The procedures set forth in this section are applicable to
a person who is required to be licensed as a debt collector pursuant to Section
100001, subdivision (a), of the Financial Code. The application for a license
shall be filed as follows:
(a) INITIAL
APPLICATION: The applicant shall complete and file Form MU1 in accordance with
the instructions of NMLS for transmission to the Commissioner. All exhibits and
supporting documents related to the application or amendment required by NMLS
or identified in this section shall also be filed with NMLS, in accordance with
the instructions of NMLS for transmission to the Commissioner. Exhibits that
cannot be filed with NMLS, if any, shall be filed directly with the
Commissioner. The notices set forth in Section 1850.11 of these rules are part
of every application.
For affiliates seeking to be licensed under a single
license, each affiliate must file a Form MU1 and comply with all licensing
requirements except for the application fee, which is a single $350 fee for the
Form MU1 filings. The Department of Financial Protection and Innovation will
issue a single license listing the names of all the affiliates.
An affiliate may be licensed under only one debt collector
license. An applicant shall provide the following information, exhibits, and
documentation in the manner provided.
(1) OTHER TRADE NAMES: An applicant shall
provide all fictitious business names on Form MU1.
(A) For each fictitious business name, an
applicant shall file with NMLS a copy of the Fictitious Business Name Statement
with the "filed" stamp from the county clerk's office.
(B) An applicant shall not engage in debt
collection using a fictitious business name until the Commissioner approves the
use of the name.
(C) Every
applicant and licensee shall comply with the laws governing the filing of a
fictitious business name set forth in Business and Professions Code sections
17900
through
17930.
(2) REGISTERED AGENT: Every
applicant shall provide a registered agent for service of process located
within the State of California through NMLS on Form MU1. Every applicant shall
also file with the Commissioner through NMLS an Appointment of the Commissioner
of Financial Protection and Innovation as Agent for Service of Process in
accordance with Section 1850.8 of these rules.
(3) WEBSITE ADDRESS: An applicant shall
provide through NMLS on Form MU1 the full web address(es) for the applicant and
any separate websites for the fictitious business names and indicate whether
the applicant transacts business through the website(s).
(4) ADDITIONAL CONTACT EMPLOYEES: An
applicant shall provide through NMLS the names of the contact employees for
consumer complaints received from the public and legal matters on Item Number 7
of Form MU1.
(5) ORGANIZATIONAL
CHART: An applicant shall file with NMLS an organizational chart identifying,
by individual or company name:
(A) Direct
owners (total direct ownership percentage must equal 100 percent
(100%));
(B) Indirect owners;
and
(C) Affiliates of the applicant
that engage in the business of debt collection or other financial services or
settlement services.
The organizational chart shall describe the control
relationship(s) with the affiliates and control entities, including the
percentage of ownership or interest, and identify the names and NMLS entity ID
numbers of the affiliates seeking to be licensed together under a single
license and the affiliate designated as the primary licensee for purposes of
examination. For each affiliate identified in Item Number 12 of Form MU1, the
applicant shall include under "Description" whether the affiliate is seeking to
be licensed with other affiliate(s), under a single license and if so, the
name(s) and NMLS entity ID number(s) of those affiliate(s), and identify which
affiliate is the primary licensee for purposes of examination. Affiliates must
provide their NMLS entity ID number to each co-applicant affiliate to enable
the affiliate to complete their Form MU1.
(6) DIRECT OWNERS, EXECUTIVE OFFICERS, AND
INDIRECT OWNERS:
(A) An applicant shall
identify the following individuals through NMLS on Form MU1 in the "Direct
Owners and Executive Officers" or the "Indirect Owners" section, as applicable,
and provide identifying information, including government-issued identification
number and the issuing state and country; names used; personal history;
employment and other business history; and experience of each individual on
Form MU2:
1. Applicant (if an
individual);
2. Principal
officers;
3. Directors;
4. Managing members (if the applicant is a
limited liability company);
5.
General partners (if the applicant is a partnership);
6. Trustees (if the applicant is a
trust);
7. Individuals owning or
controlling, directly or indirectly, ten percent (10%) or more of the
applicant; and
8. Individuals
responsible for the conduct of the applicant's debt collection activities in
this state.
(B) The
individuals named on Form MU1 for whom a Form MU2 has been filed shall provide
authorization for and subsequent delivery of fingerprints to the California
Department of Justice to check criminal history. Fingerprinting shall be done
in accordance with Section 1850.9 of these rules.
(C) An applicant must file an investigative
background report for any individual named on Form MU1 for whom a Form MU2 has
been filed and who is not residing in the United States or has not resided in
the United States for at least ten years in accordance with Section 1850.10 of
these rules. This investigative report shall be required in addition to
fingerprinting.
(D) An applicant
shall pay all fees related to fingerprinting, the criminal history background
check, and the investigative background report.
(7) FINGERPRINTS: Every individual for whom a
Form MU2 has been filed shall submit fingerprints in accordance with Section
1850.9 of these rules.
(8) CREDIT
REPORT: Every individual for whom a Form MU2 has been filed shall provide
through NMLS the necessary authorizations for NMLS to obtain a credit report
for the individual and an explanation of all derogatory credit accounts in the
credit report.
(9) MANAGEMENT
CHART: An applicant shall file with NMLS a management chart identifying by
individual name and title, the applicant's:
(A) Directors;
(B) Principal officers;
(C) Any manager or other individual
responsible for the conduct of the applicant's debt collection activities in
California;
(D) General and
managing partners;
(E) Managing
members; and
(F)
Trustees.
(10) BUSINESS
ACTIVITIES: In addition to the identification of business activities required
on Form MU1, an applicant shall file with NMLS a detailed description of the
applicant's business activities that includes the following information:
(A) The methods that will be used to collect
consumer debt.
(B) Any products or
services offered to consumers or required to be accepted or purchased by
consumers in connection with debt collection activities.
(C) Whether any other business will be
solicited or engaged in at the applicant's place(s) of business.
(D) Any additional activities that the
applicant intends to engage in that are not specified in Item Number 1 of Form
MU1.
(11) BUSINESS
APPLICANTS: A business entity shall file the following documents with NMLS:
(A) A corporate applicant shall file a
certificate of qualification or good standing from the California Secretary of
State, executed not more than sixty (60) calendar days before the filing of the
application, showing that the applicant is authorized to transact business in
the State of California.
(B) A
foreign corporation shall file a certificate of qualification or good standing
from the Secretary of State of the state of incorporation, executed not more
than sixty (60) calendar days before the filing of the application, showing
that the applicant is authorized to transact business in that state.
(C) A partnership applicant shall file its
partnership agreement.
(D) A
limited liability company shall file its operating agreement.
(E) A limited partnership or limited
liability company applicant shall file a certificate of qualification or good
standing from the California Secretary of State, executed not more than sixty
(60) calendar days before the filing of the application, showing that the
applicant is authorized to transact business in the State of
California.
(F) A foreign limited
partnership or limited liability company applicant shall file a certificate of
qualification or good standing from the Secretary of State of the state of
formation, executed not more than sixty (60) days before the filing of the
application, showing that the applicant is authorized to transact business in
that state.
(12) SURETY
BOND: An applicant shall file the surety bond required by Section 100019,
subdivision (e), of the Financial Code through NMLS, utilizing NMLS' electronic
surety bond function and form, in accordance with Section 1850.50 of these
rules.
(13) DOCUMENT SAMPLES: An
applicant shall file with NMLS a sample of the initial letter required pursuant
to Section 1692 g of Title 15 of the United States Code that the applicant will
use in correspondence with California consumers and a sample of the notice
required pursuant to Section 1788.52, subdivision (d), of the Civil Code that
the applicant will use in correspondence with California consumers.
(14) SUPPLEMENTAL INFORMATION: An applicant
shall file the following information on debt collection activities as of the
prior year-end with the Commissioner through NMLS:
(A) The total dollar amount of net proceeds
generated by California debtor accounts (i.e., from accounts that are owed by
consumers who reside in California at the time the consumer made a payment on
the account) as of the prior calendar year-end. The information is required to
calculate the licensee's assessment for the year of licensing pursuant to
California Financial Code section 100020, subdivision (a).
This information is required only at the time of filing an
application. The information will be collected thereafter in the licensee's
annual report pursuant to California Financial Code section 100021, subdivision
(a).
(15) BRANCH
OFFICE: An applicant shall register its branch offices by filing with NMLS a
Form MU3 for each branch office.
(A) An
applicant that intends to conduct business at a branch office under a
fictitious business name shall file with NMLS a copy of the Fictitious Business
Name Statement with the "filed" stamp from the county clerk's office.
(B) An applicant shall not use a fictitious
business name until the Commissioner approves the use of the name.
(C) An applicant shall indicate each branch
manager as a branch manager on Form MU3 and file with NMLS a Form MU2 for each
branch manager.
(D) An applicant
shall provide for each branch office through NMLS on Form MU3 the full web
address(es) for the branch office and any separate websites for the fictitious
business names and indicate whether the applicant transacts business through
the website(s).
(E) The
Commissioner may request other information, documentation, or detail pertaining
to a branch office that cannot be filed through NMLS to be filed directly with
the Commissioner.
(16)
BANK ACCOUNT/QUALIFYING INDIVIDUAL: An applicant is not required to provide
bank account information in Section 10 of Form MU1 or information on a
qualifying individual in Section 17 of Form MU1.
(17) ATTESTATION: The individual attesting to
the filing of the Form MU1 must be a duly authorized individual who has
submitted a Form MU2 or has been delegated to attest to the filing by an
individual who has submitted a Form MU2. The attestation provided pursuant to
this paragraph shall constitute an agreement to comply with the requirements of
the Debt Collection Licensing Act.
(b) FEES: An application fee of $350 and an
investigation fee of $150 per applicant shall be paid through NMLS for
transmission to the Commissioner. Any fees that cannot be paid through NMLS
shall be paid directly to the Commissioner. The NMLS fees for obtaining credit
reports, annual processing fees, and any other NMLS fees shall be paid by
applicants and licensees to NMLS through NMLS. Fees are not
refundable.
(c) COMPLETION OF
FILING and ISSUANCE OF LICENSE: An application for a license as a debt
collector is not deemed complete until all required fees, all required
submissions, and all background and investigative reports are received by the
Commissioner. The filing of Form MU1 with NMLS does not constitute automatic
approval of a license. An applicant shall not consider the application approved
until it is approved by the Commissioner and the Commissioner notifies the
applicant of the license approval. The Commissioner shall email approval of the
license to the individual named in the Form MU1 as the "Primary Company
Contact." In accordance with Section 100013 of the Financial Code, the
Commissioner may consider a Form MU1 application abandoned if the Commissioner
does not receive information requested in a deficiency notification within
sixty (60) calendar days of the date of notification.
(d) FILING AN AMENDMENT: In the event of a
change to the information in the application, or the exhibits or supporting
documents, the applicant shall file an amendment to the Form MU1, MU2, or MU3
through NMLS in accordance with the procedures in Sections 1850.30, 1850.31,
and 1850.32 of these rules. Prior to the issuance of a license, any amendment
to an application shall be filed within ten (10) calendar days of the event
requiring the amendment.
Note: Authority cited: Section 100003, Financial Code.
Reference: Sections
494.5,
17900,
17910,
17913,
17915,
17916
and
17926,
Business and Professions Code; Sections
1788.52,
1798.17 and
1798.24, Civil
Code; Section
1505,
Corporations Code; Section
17520, Family
Code; Sections 100001, 100003, 100004, 100005, 100006.3, 100007, 100008,
100009, 100011, 100013, 100015, 100018 and 100019, Financial Code; Section
11077.1, Penal
Code;
5 U.S.C. section
552a; and
15 U.S.C. section
1692g.
