AFSA Comments on Proposed Rules from California DFPI
On September 17, AFSA submitted comments in response to proposed rules from the California Department of Financial Protection and Innovation (DFPI). The proposed rules set forth requirements for licensees to establish a process for receiving and responding to consumer complaints. The prescriptive rules set specific timeframes for resolving complaints and the various disclosures about the process that licensees must make to consumers.
AFSA’s letter explained that the proposed rules would be incredibly burdensome and require significant changes with little added consumer benefit. Many of the rules’ requirements would likely increase costs for consumers due to the necessary expense required to implement the significant changes and the increased costs of doing business in the state. Consumer complaints are a valuable tool for improving business, identifying systemic issues, and detecting potential violations of applicable consumer protection laws, and monitoring consumer complaints is a core pillar of an effective compliance management system. The letter noted that financial institutions already have robust processes in place to receive and process consumer complaints. These processes are integrated into existing phone and mail systems—systems with which consumers are already familiar—so a complaint process specific to a single state would require significant changes to numerous company systems for consumers who already know how to contact a company. Accordingly, AFSA requested that DFPI’s rules should provide more flexibility for covered persons to operate within their existing complaint processes appropriate to the size and complexity of their business, which will streamline implementation and speed up response times for consumers across company segments.
AFSA’s letter and testimony, as well as other SGA advocacy actions, can be found on the State Direct Advocacy section of the AFSA website.
September 21st, 2021 by Dan Bucherer