As part of the 2020-21 state budget proposal, California Gov. Gavin Newsom plans to roll out California's own state-level Consumer Financial Protection Bureau. Newsom unveiled a California Consumer Financial Protection Law on Friday.
“As the Trump administration undermines and weakens the rules that protect consumers from predatory businesses, California is filling the void and stepping up to protect families and consumers,” Newsom told the Los Angeles Times.
The new California Consumer Financial Protection Law would allegedly overhaul the existing Department of Business Oversight and rename it the Department of Financial Protection and Innovation, or DFPI.
"The federal government’s rollback of the CFPB leaves Californians vulnerable to predatory businesses and leaves companies without the clarity they need to innovate," the budget summary stated.
According to Times’ sources, the new Department of Financial Protection and Innovation would include “dozens of new staff” and greater scrutiny of consumer markets “to identify patterns of abuse.” The 2020-21 state budget will include $10.2 million Financial Protection Fund and 44 positions, growing to $19.3 million and 90 positions ongoing in 2022-23, which is intended to provide consumers with more protection against unfair and deceptive practices when accessing financial services and products.
"This will be accomplished by expanding the Department’s authority to pursue unlicensed financial services providers not currently subject to regulatory oversight such as debt collectors, credit reporting agencies, and financial technology (fintech) companies, among others," the summary adds.
The DFPI's new duties will include licensing and examining new industries that are currently under-regulated, analyzing patterns and developments in the market to inform evidence-based policies and enforcement, consumer education programs, a new Financial Technology Innovation Office that will proactively cultivate the responsible development of new consumer financial products, legal support for the administration of the new law, and additional staff to support the Department’s increased regulatory responsibilities.