On September 25, 2020, California Governor Gavin Newsom signed the California Consumer Financial Protection Law (CCFPL), Assembly Bill 1864, which replaces the Department of Business Oversight (DBO) with the new Department of Financial Protection and Innovation (DFPI). The CCFPL codifies Governor Newsom's plan to modernize and revamp the DBO by adding staff and increasing its authority to protect consumers of financial services or products.
But with the new law set to go into effect on January 1, 2021, several key aspects remain unsettled. To better understand the CCFPL, this chart provides an overview of similarities and differences between California's DBO and the new DFPI.
The key takeaways include:
- FinTech companies, payday lenders, debt collectors, and other service providers that have not been regulated by California may now face oversight. This is because the new DFPI has broad discretion to oversee, and determine what constitutes, a "financial product or service."
- In addition to enforcing laws related to covered entities, the CCFPL enhances the DFPI's oversight by establishing authority to enforce laws against unfair, deceptive, or abusive acts or practices. The DFPI may bring a civil action or other appropriate enforcement proceeding.
- The DFPI may, but has yet to, prescribe new registration rules, which may include requiring filings under oath, the payment of registration fees, and registration through the Nationwide Multistate Licensing System & Registry (NMLS).