Section 1850.7 - License Application for Debt CollectorThe 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%));(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);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; and8. 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: (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(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.Cal. Code Regs. Tit. 10, § 1850.7
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.
1. New section filed 12-22-2021; operative 12/22/2021 pursuant to Government Code section 11343.4(b)(3) (Register 2021, No. 52). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20.