On April 7, two trade associations and a licensed debt collector filed a putative class action in the California Superior Court for the County of San Francisco alleging that the California DFPI’s annual debt-collector licensing assessments violate the Debt Collection Licensing Act, Proposition 26, and the California Administrative Procedure Act. The complaint also alleges that the assessment scheme fails to provide a clear, adequately disclosed formula for calculating annual fees.
The class action challenges DFPI’s 2025 annual assessments for licensed debt collectors and seeks relief on behalf of a proposed class of about 1,243 licensees statewide. Specifically, the suit alleges that DFPI’s fee regime is unlawful because:
- The annual assessments exceed reasonable regulatory costs. The complaint alleges the fees constitute unlawful taxes in violation of Proposition 26, which requires that state-imposed charges not exceed the reasonable cost of regulation and bear a fair relationship to each payor’s burden on, or benefit from, the regulatory scheme. The suit alleges those charges are disproportionate and materially higher than comparable charges in other states.
- The assessment formula was not adequately disclosed. The suit alleges DFPI did not clearly explain the calculation methodology in its regulations or rulemaking materials.
- The advisory process was deficient. The complaint alleges DFPI did not meaningfully consult the Debt Collection Advisory Committee regarding the proposed fee schedule or the mechanics of implementation.