California wants to launch state-level CFPB

by Ryan Smith13 Jan 2020

The governor of California is pushing for the creation of a state version of the Consumer Financial Protection Bureau.

Gov. Gavin Newsom on Friday unveiled a California Consumer Financial Protection Law as part of his proposed 2020-21 state budget, according to a report by The Los Angeles Times. The proposed law would overhaul California’s existing Department of Business Oversight and rename it the Department of Financial Protection and Innovation (DFPI).

Newsom said the proposal was in response to the relaxing of CFPB authority under the Trump administration. Since Donald Trump took office, the federal regulator has lessened its oversight of financial firms.

“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 said in an email to the Times.

The state’s current Department of Business Oversight licenses and regulates securities brokers and dealers, investment advisors and payday lenders, according to the Times. As the DFPI, it would take on additional regulatory authority, add dozens of new staff members, more closely scrutinize consumer markets, and increase outreach to frequently targeted consumers, such as immigrants and veterans.

The new law would also give California oversight of debt collectors, which is currently limited to federal regulators, the Times reported.