The Governor of California has earmarked more than $11 million of the budget for the state’s Department of Financial Protection & Innovation to “protect consumers and ensure transparency of the debt collector industry through strong government oversight and data collection.” The item was part of Gov. Gavin Newsom’s $286 billion budget that was released earlier this week.
Overall, the budget calls for DFPI to receive $157 million in funding for the 2022-23 fiscal year. The $157 million is $7 million more than what the DFPI received last year.
The money that has been allocated for the debt collection program will be used for the “regulation, supervision, and examination of debt collectors, which helps provide compliance with laws and regulations.”
California recently became the latest state to institute a debt collection licensing program, and is working its way through all of the applications that have been filed so far. Companies that submitted a completed application prior to December 31 are allowed to continue collecting in the. state while the application is bring processed.
Gov. Newsom also proposed spending $12.5 million on expanding consumer financial protection against illegal, deceptive, or unscrupulous practices “through the supervision of certain financial product and service providers not previously regulated by the Department prior to January 1, 2021,” engaging in market research, consumer education, and to “encourage” innovative financial products.
Among the “major” program changes announced in the budget was a $10 million allocation for student loan borrower assistance. This will be spent by launching a communications campaign and grant program that will aim to inform, educate, and assist student borrowers who are scheduled to start making student loan payments again in May, following a two-year pause due to the COVID-19 pandemic.
