The California Department of Financial Protection and Innovation (DFPI) is listening to industry input as it finalizes its proposed complaints and inquiries regulation. Its most recent update (Third Proposal) included the adoption of language recommended by the Consumer Relations Consortium (CRC) to avoid creating personal liability for employees of covered entities.

CRC Legal Advisory Board members Jessica Klander of Bassford Remele and John Bedard of Bedard Law Group prepared the CRC's comments.


The DFPI released its original proposal in May 2022 and an update (which also adopted the CRC’s suggestions) in December 2022. In March 2023, the DFPI published a second update that appeared to create personal liability by requiring a covered entity to designate an officer who is “ultimately accountable” for the effective operation and governance of the complaint process. This phrase appeared to create personal liability for employees of covered entities.

On April 7, 2023, the CRC submitted a comment suggesting the DFPI could achieve its regulatory goals without creating personal liability by making the following changes:


  1. Striking the phrase “ultimately accountable”; and 

  2. Updating the definition of “officer” to say, “‘Officer’ means an individual designated by the covered person with primary authority and responsibility for the effective operation and governance of the complaint process, including the authority and responsibility to monitor the complaint process and resolved complaints.”

The DFPI followed both suggestions in the Third Proposal.

The language proposed in the CRC's comment is included verbatim in Section 1071(c) of the Third Proposal in the newly created definition of “Complaint officer” (page 3) and in Section 1072(f), which created personal liability in the previous version (page 7). The phrase “ultimately accountable” has been removed entirely. 

The Third Proposal also includes minor clarifications and replaces font size requirements with a “clear and conspicuous” standard. Comments to the Third Proposal are due Saturday, April 29, 2023.

The Third Proposal can be found here.

The CRC's comment, now adopted by the DFPI, 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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