On May 20, California’s Department of Financial Protection and Innovation (DFPI or Department) announced that it had filed a Notice of Proposed Rulemaking with the Office of Administrative Law, inviting public comments on the proposed rulemaking. The purpose of the proposed regulations is to implement, interpret, clarify, and make specific, certain sections of the California Consumer Financial Protection Law (CCFPL) that impose requirements on covered companies to respond to consumer complaints and report information about those complaints and responses to the DFPI.

Specifically, the DFPI is proposing to make explicit what it means to provide a timely response to consumers and to the Department regarding complaints against or inquiries concerning a covered person and received by the covered person. Covered persons are expected to have appropriate procedures to review, investigate, respond to, track, and report consumer complaints and inquiries. Notably, these proposed procedures apply to complaints received directly by a company — they are not limited to complaints submitted to the DFPI.

For each complaint, covered persons must provide the complainant with a written acknowledgement of receipt. Under the proposed rules, the written acknowledgement of receipt shall advise that the complaint has been received and shall include the date of receipt, a unique tracking number to identify the complaint in subsequent communications, and the telephone number and email address that can be used to contact the appropriate representatives of the covered person who have been designated to handle the complaint. The timing and manner of providing this acknowledgment would vary depending on the channel through which the complaint was received:

Emailed complaints or complaints received via the internet. Covered persons would be required to provide the complainant, within one calendar day after receiving the complaint, an email confirming that the electronic submission of the complaint was successful and, within five calendar days after receiving the complaint, an email message with the written acknowledgement of receipt. Both email messages would be required to be sent from the email address provided to the complainant, and they may be combined if provided within one calendar day after receiving the complaint.

Complaints received via postal mail. The proposed rules would require that covered persons provide the written acknowledgement of receipt via postal mail within seven calendar days of receiving the complaint.

Complaints received via telephone. Under the proposed rules, covered persons would orally provide the complainant with a unique tracking number to identify the complaint and, within seven calendar days of receiving the complaint, provide via postal mail a written acknowledgement of receipt.

The proposed rule would allow written acknowledgements to be combined with the issuance of a final decision if the final decision is issued within the required time period for the acknowledgement.

Covered persons would also be required to maintain a written record of each complaint for at least five years from the time the complaint was initially filed. The written record mandated by the proposed rules is fairly extensive and includes:

  1. A unique tracking number.
  2. The name, phone, address, and email address (if provided).
  3. The name of the financial service or product involved.
  4. The name of the covered person or third party identified as the subject of the complaint.
  5. For oral complaints, the name of the representative who documented the complaint.
  6. The date the complaint was received.
  7. The date the covered person provided the acknowledgement of receipt.
  8. The dates of any investigation.
  9. The dates of all responses to the complaint.
  10. The nature and details of the complaints.
  11. If no investigation was performed, the names of all persons who decided not to investigate, and the reason why the investigation was not needed.
  12. The results of any investigation.
  13. Any corrective action.
  14. A copy of (or an electronic link to) all contracts, correspondence, and other relevant information upon which the covered person relied to reach his or her final decision.
  15. A copy of all written responses and summaries of all oral responses, including an explanation of the final decision regarding the complaint.

In addition, covered persons would be required to submit to the Department a quarterly complaint report, including the total number of complaints received, total number of complaints for which a final decision was issued (broken out by “within 15 calendar days,” “between sixteen and sixty calendar days,” and “more than 60 calendar days), which shall be made available to the public. The report would be required to include information regarding all complaints received by the covered person, including complaints forwarded by the Department. Under the proposed rules, the report should be prepared for the quarters ending March 31, June 30, September 30, and December 31 of each calendar year, verified by an officer authorized to act on behalf of the covered person, and filed with the Consumer Financial Protection Division no later than 30 calendar days after the end of each quarter.

The comment period on the proposed rules is open until July 5.

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Photo of Chris Willis Chris Willis

Chris is the co-leader of the Consumer Financial Services Regulatory practice at the firm. He advises financial services institutions facing state and federal government investigations and examinations, counseling them on compliance issues including UDAP/UDAAP, credit reporting, debt collection, and fair lending, and defending…

Chris is the co-leader of the Consumer Financial Services Regulatory practice at the firm. He advises financial services institutions facing state and federal government investigations and examinations, counseling them on compliance issues including UDAP/UDAAP, credit reporting, debt collection, and fair lending, and defending them in individual and class action lawsuits brought by consumers and enforcement actions brought by government agencies.

Chris also leverages insights from his litigation and enforcement experience to help clients design new products and processes, including machine learning marketing, fraud prevention and underwriting models, product structure, advertising, online application flows, underwriting, and collection and loss mitigation strategies.

Chris brings a highly practical focus to his legal advice, informed by balancing a deep understanding of the business of consumer finance and the practical priorities of federal and state regulatory agencies.

Chris speaks frequently at conferences across the country on consumer financial services law and has been featured in numerous articles in publications such as the Wall Street Journal, the New York Times, the Washington PostAmerican BankerNational Law JournalBNA Bloomberg, and Bank Safety and Soundness Advisor.

Photo of Stefanie Jackman Stefanie Jackman

Stefanie devotes her practice to assisting financial services institutions facing state and federal government investigations and examinations, counseling them on complex compliance issues, as well as defending them in individual and class action lawsuits. Stefanie represents clients across the financial services industry, including…

Stefanie devotes her practice to assisting financial services institutions facing state and federal government investigations and examinations, counseling them on complex compliance issues, as well as defending them in individual and class action lawsuits. Stefanie represents clients across the financial services industry, including banks and nonbanks, mortgage banking lenders and servicers, debt collectors and buyers, third-party service providers, health care and medical revenue cycle service providers, credit and prepaid card companies, auto lenders, and fintechs. She regularly advises her clients on issues arising under an array of federal and state consumer financial laws, including UDAP/UDAAP statutes, the FDCPA, FCRA, TCPA, EFTA, SCRA, and TILA.

In addition to her litigation and government investigations work, Stefanie focuses a significant portion of her practice on providing compliance-related advice to her clients. She regularly counsels clients on conducting compliance assessments relating to their debt collection, credit reporting and dispute resolution processes, fair lending and underwriting, and vendor oversight, as well as the functionality of their overall compliance management system. Stefanie also brings her litigation and enforcement experience to bear in assisting clients in designing new products and processes, including product structuring, advertising, online application flows, underwriting, and servicing-related strategies.

Photo of Susan Nikdel Susan Nikdel

Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone…

Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes. Susan also represents banks, fintechs, and financial services companies in connection with regulatory examinations and investigations brought by the CFPB, state attorneys general, and the California Department of Financial Protection and Innovation.