Are used car dealers subject to the new debt collector licensing law??

Governor Newsom in his wisdom has signed and passed a new law requiring licensure of all persons engaged in the business of debt collection.

Car Dealers, especially BHPH car dealers, engage in the licensed business of selling cars and occasionally have to engage in debt collection.

The unanswered question has arisen.

Do Licensed, Bonded California Car Dealers need to register as debt collectors under this new law ??

The CNCDA has posed this very question to the head of the agency implementing the new law.

The State of California has not made a determination on this very important question.

For these reasons, we ask the DMV to clarify the definition of “engaging in the business of debt collection” so that retailers like used car dealers that incidentally engage in debt collection are not required to obtain a license. 

For reference points on this new law: