ACA International and Industry Partners File Suit Challenging California’s Licensing Assessments

The suit argues the state issued unlawful assessments under the Debt Collection Licensing Act, driving businesses out of the California market and ultimately impacting affordable access to credit.

April 8, 2026 – San Francisco – ACA International, R.M. Galicia Inc., dba Progressive Management Systems, and Receivables Management Association International (RMAI) have filed a lawsuit against the California Department of Financial Protection and Innovation (DFPI) for unlawful licensing assessments initiated in 2025.

The lawsuit, filed by Colantuono, Highsmith and Whatley, P.C. in the Superior Court of California, San Francisco County, seeks injunctive relief to cease enforcement of the unlawful fees, refunds of the fees paid to date and a judicial declaration that the licensing fees are invalid, among other items.

To avoid immediate license suspension, revocation, and the reputational and operational consequences, the plaintiffs and many of RMAI’s and ACA’s members were compelled to pay licensing fees that have had significant adverse impacts on industry participants.

Some have withdrawn from the California market. Others have sold or returned their portfolios of California debt. While many licensees paid 2025 licensing fees under protest, others have not paid or cannot pay, expecting to surrender their California licenses.

“As a California business owner directly impacted by these excessive fees, I believe it’s critical that we speak up when regulatory implementation goes beyond what was intended. We support strong, thoughtful regulation, but the DFPI needs to correct its approach to licensing assessments under the Debt Collection Licensing Act so that costs remain reasonable and aligned with the actual scope of oversight,” said Courtney Reynaud, president of Creditors Bureau USA in Fresno, California. “This is not just about responding to what’s happening in California. It’s about setting a precedent and protecting against similar issues in other states.”

The plaintiffs challenge DFPI’s implementation of the assessments imposed under the Debt Collection Licensing Act (DCLA), enacted by 2020’s Senate Bill 908, for the following reasons:

• The total to be recovered exceeds the reasonable cost of regulation, not least because DFPI grossly overestimated the number of regulated debt collectors in California, and its fees are so high as to drive many out of the California market, further compounding that problem.
• Audit costs are unreasonably high when compared to those other states charge and can be imposed on a licensed business in DFPI’s discretion. This makes doing business in California a lottery with a potentially significant, negative payoff.
• The allocation of fees based on the gross receipts (or proxies for gross receipts) of regulated businesses is grossly disproportionate to larger businesses’ burdens on or benefits from the regulatory program.

The DFPI constructed its regulatory budget upon materially erroneous market-size data and thereafter failed to make any corresponding adjustment upon learning that its estimated market size of approximately 7,000 licenses was actually comprised of approximately 1,200 licensees — an 83% shortfall.

As a result, the licensing program, the DFPI’s budget, and fees are unreasonably large.

“ACA International is a steadfast champion of professional excellence and a well-regulated credit ecosystem by entities at the federal and state level,” said ACA International CEO Scott Purcell. “However, we will not stand by while a state agency ignores its own advisory committee and operates outside the law to fund an inflated budget through disproportionate, unconstitutional taxes disguised as licensing fees.”

The DFPI now also proposes to sweep additional organizations into its debt collection licensing requirements — ultimately showing that fees exceed the reasonable cost of regulating the actual licensees. The DFPI is trying to cover its budget, not allocate the reasonable costs of regulation.

By reducing the number of businesses willing to help Californians collect debts and raising their costs to do so, illegal licensing fees will raise the cost of credit in California, reduce its availability, and harm the state’s economy and all who depend on it. Given the current cost-of-living crisis, this is not the time to raise borrowing costs.

Overall, the complaint highlights California’s heavy industry oversight and its fee-based regulatory overreach — a critical issue since other states often mirror California’s models.

“We have consistently fought broad regulatory overreach that ultimately harms businesses and consumers they serve, and the actions by California’s DFPI fit the bill for that fight,” Purcell said.

Read the complaint here (PDF).

ACA International (ACA), the association of credit and collection professionals, is the largest membership organization in the credit and collection industry. Founded in 1939, ACA brings together third-party collection agencies, law firms, asset-buying companies, creditors and vendor affiliates, representing tens of thousands of industry professionals. ACA produces a wide variety of products, services and publications, including educational and compliance-related information, and articulates the value of the credit and collection industry to businesses, policymakers and consumers. www.acainternational.org.