DFPI tells BPPE advisory committee that tuition payment plans, income-sharing agreements and other education credit products must register

Representatives from the California Department of Financial Protection and Innovation told the BPPE advisory committee that providers of education financing — defined to include credit for tuition, fees, books, room and board, and other costs of attendance — must register under California’s new consumer financial law unless an exemption applies.

DFPI Deputy Commissioner Markel Kelly and senior counsel Sam Park summarized the department’s first registration rulemaking under the California Consumer Financial Protection Law (CCFPL), which added registration for several product categories including education financing. The DFPI’s rules took effect following Office of Administrative Law approval and require covered persons to file registration applications through the Nationwide Multistate Licensing System (NMLS).

Kelly told the committee that tuition payment plans without interest or fees qualify as education financing and therefore require DFPI registration. He also said income‑sharing agreements and other income‑based advances fall within the definition and must be registered. Third-party partnerships that arrange or provide education financing are likewise subject to registration unless they hold an exempting license.

DFPI officials explained a number of exemptions. Entities offering financing under the authority of a license issued by another state or federal regulator — for example, banks, credit unions, or licensees acting under certain DFPI authorities — may be exempt. Public and nonprofit postsecondary institutions are exempt, and the DFPI noted a limited merchant-style exemption in the Financial Code that could apply to some smaller sellers whose credit does not exceed the fair market value of the goods or services and who make 25 or fewer credit transactions per year.

Kelly said the registration package became effective February 15, 2025; the DFPI opened NMLS applications November 1, 2024; and entities had to submit applications (or obtain exempt status) prior to the effective date to operate in California lawfully. He said the DFPI will review applications and take enforcement action as appropriate, but that the department intends to consider case-by-case circumstances where registrants may have been unaware of the requirements. The DFPI recommended institutions check the DFPI’s online license/registration lookup and contact the department with questions.

No committee action was taken during the presentation. DFPI staff said they will publish additional education-financing guidance and make an education-financing resource page available on dfpi.ca.gov.