Debt Collectors Sue California Regulator Over $10.2 Million in Licensing Fees

California’s Debt Collection Licensing Act, enacted through Senate Bill 908 in 2020, requires debt collectors operating in the state to obtain a license from the Department of Financial Protection and Innovation. The DFPI began licensing collectors in 2022 and finances oversight through annual assessments tied to licensees’ net proceeds. The dispute matters because those charges can determine whether firms remain in California and may affect compliance expenses and the cost and availability of consumer credit.

ACA International, Receivables Management Association International and R.M. Galicia Inc., doing business as Progressive Management Systems, filed a proposed class action in San Francisco Superior Court on April 7, 2026. They allege the DFPI built its budget around more than 7,000 licensees although only 1,243 were licensed, then assessed $10.2 million for 2025. Fees ranged from $250 to $1,421,404, with 18 companies facing six- or seven-figure bills. The plaintiffs seek an injunction, refunds and a declaration that the assessments are unlawful taxes.