The Consumer Relations Consortium (CRC) has asked the California Department of Financial Protection and Innovation (DFPI) to remove language from the most recent iteration of its complaints and inquiries regulation to avoid creating personal liability for employees of covered entities. The CRC also suggested that to better serve consumers, the DFPI should allow electronic disclosures without an opt-in. 

The CRC's comments, prepared by Legal Advisory Board members John Bedard of Bedard Law Group and Jessica Klander of Bassford Remele asked the DFPI to modify its proposal as follows:

Remove the potential for personal liability

The DFPI’s March 23, 2023, update to its proposed complaints and inquiries regulation (Proposed Rule) includes a requirement that a covered entity shall designate an officer who is "ultimately accountable" for the effective operation and governance of the complaint process. 

The phrase "ultimately accountable" creates a significant discrepancy. 

If left as is, it may be interpreted to assign personal liability to a designated employee overseeing the complaint process, which seems contrary to the overall application of the Proposed Rule. Further, no other industries hold officers personally liable for overseeing and implementing complaint processes and procedures. To cure this inconsistency, the CRC suggested: 

  1. Update the definition of "officer" to clarify that an "officer" has authority and responsibility for the effective operation and governance of the covered entity's complaint process; and

  2. Entirely remove the phrase “ultimately accountable.”

With these changes, the DFPI can achieve its goal of requiring a covered entity to have a person overseeing the complaint process without potentially subjecting an individual employee to personal liability.  

Allow annual notices to be sent electronically without an opt-in


The Proposed Rule creates additional hurdles for consumers by allowing covered entities to send annual disclosures electronically only if the consumer has previously agreed to receive electronic correspondence. To better serve consumers who generally prefer electronic communication, and because of the expense and difficulty associated with traditional mail, the CRC has asked the DFPI to reverse its opt-in requirement and allow covered entities to send notices either in writing or electronically. 

The CRC’s full comment can be found here

About the Consumer Relations Consortium 

The Consumer Relations Consortium (CRC) is an organization comprised of more than 60 national companies representing the diverse ecosystem of debt collection including creditors, data/technology providers, and compliance-oriented debt collectors that are larger market participants. Established in 2013, CRC is evolving the debt collection paradigm by engaging stakeholders—including consumer advocates, Federal and State regulators, academic and industry thought leaders, creditors and debt collectors—and challenging them to move beyond talking points and focus on fashioning real-world solutions that actually improve the consumer experience. CRC’s collaborative and candid approach is unique in the market.  CRC is managed by The iA Institute.

About the Legal Advisory Board

The Legal Advisory Board (LAB) is an exclusive membership group of outside counsel with expertise in the accounts receivable industry who have each pledged their time and resources to support the mission of the CRC. The LAB is limited to ten law firms and is comprised of fourteen total attorneys. The 2023 members can be found here. Throughout the year, the LAB serves as a legal resource to the CRC membership and assists in fulfilling the mission of promoting forward-thinking approaches to the issues raised by regulatory policy and technology innovation in the accounts receivable industry.

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