California has become the latest state to create its own mini Consumer Financial Protection Bureau (CFPB). As part of the 2020-21 budget, Governor Gavin Newsom set in motion a reorganization and significant expansion of the authority of the California banking regulator, the Department of Business Oversight (DBO). This reorganization includes a new name (the “Department of Financial Protection and Innovation” or DFPI), greatly expanded examination and enforcement resources, new licensing and examination authority, and a new law (the “California Consumer Financial Protection Law” or CCFPL) that gives the regulator unfair, abusive, or deceptive acts or practices (UDAAP) and other authority mirroring the CFPB’s authority under Dodd-Frank Act Title X.
In this Client Alert, we outline the governor’s justification for and reorganization of the DBO into the DFPI. In a companion Client Alert, we highlight the key provisions in the CCFPL.
