As discussed here, 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. The purpose of the proposed regulations is to make explicit what it means to provide a timely response to consumer complaints. Covered persons are expected to have appropriate procedures to review, investigate, respond to, track, and report consumer complaints and inquiries. Yesterday, the DFPI issued a Notice of Modifications to the proposed regulations. These modifications include:

Amendments to definitions:

  • The proposed regulations will not apply to:
    • A person or entity already exempted from the California Consumer Financial Protection Law under Section 90002 of the Financial Code.
    • A consumer reporting agency as defined by the Fair Credit Reporting Act (FCRA).
    • A student loan servicer.
  • “Complaint” is amended to include an oral or written expression of dissatisfaction from a complainant regarding a specific issue or problem with a financial product or service.
    • A “complaint” does not include:
      • An oral complaint directly filed by the complainant with the covered person, but only if the complainant has verbally confirmed that the matter has been fully resolved.
    • A billing error notice.
    • A dispute filed with a furnisher of information pursuant to FCRA.
    • A request filed with a creditor for a statement of reasons underlying a decision to deny credit.
    • A notification filed by a consumer with a debt collector to dispute the validity of the debt.
    • A notification of error filed with a financial institution pursuant to 15 U.S.C. Sec. 1693f.
    • Any matter under litigation.
    • A dispute submitted to the covered person by a governmental entity other than the DFPI.
  • “Complainant” is amended to provide that the consumer must have been a resident of California at the time of the act, omission, decision, condition, or policy giving rise to the complaint.

Amendments to complaint procedures:

  • The covered person shall:
    • Accept all complaints, whether written or oral, so long as the complaint includes a reason for filing the complaint and sufficient information to identify the complainant.
  • The covered person shall not:
    • Request personal identifying information beyond what is reasonably necessary to identify the complainant and to send correspondence, or
    • Request financial information unrelated to the specific complaint of the consumer.
  • The covered person shall not impose a time limit for filing a complaint shorter than one year from the time the complainant discovers the act, omission, decision, condition, or policy that is the subject of the complaint. If the covered person imposes a time limit, it will need to include that in the required consumer disclosures.
  • For each complaint, the covered person shall send the complainant a written acknowledgement of receipt, postmarked or with other proof to show the acknowledgement was sent within five business days after receiving the complaint.
    • The acknowledgement may be provided electronically if the consumer has agreed to receive electronic correspondence from the covered person.
    • A covered person shall not be required to send a written acknowledgement of receipt for subsequent, duplicative complaints.
  • For each financial product or service offered, the covered person shall submit to the Department an annual (as opposed to quarterly) complaint report, which shall (with limited exceptions) be made available to the public. Each report shall include information regarding all complaints received by the covered person during the reporting period. Each report shall be filed electronically with the Consumer Financial Protection Division no later than 60 business days after the end of each calendar year.

The comment period on the proposed modifications is open until January 13, 2023.