California DFPI Launches Investigation Into Four Student-Loan Debt-Relief Companies

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Piggy Bank with a Graduation CapOn February 4, 2021, the California Department of Financial Protection and Innovation (DFPI) launched an investigation into whether four California-based student-loan debt-relief companies violated the new California Consumer Financial Protection Law (CCFPL) and Student Loan Servicing Act (SLSA).  The CCFPL took effect on January 1, 2021 and expanded the DFPI’s regulatory and enforcement authority, to cover previously unregulated consumer financial products and services.​  The SLSA  took effect on July 1, 2018 and requires that California student loan servicers obtain licenses from the DFPI.

According to the DFPI, its subpoenas request emails and documents relating to the companies’ alleged debt relief services. The DFPI indicated that it is investigating whether the companies engage in or have engaged in any unlawful, unfair, deceptive, or abusive acts or practices in violation of California law, and whether the companies’ business activity requires a license.  Responses to the subpoenas are due in March.​