California’s Mini-CFPB initiative roared back to life when, as part of its 2020–21 budget, the California state senate approved a plan to establish a state consumer financial protection agency—the Department of Financial Protection and Innovation (DFPI) —the so-called “the California mini-CFPB,” under a division of the California Financial Code titled the “California Consumer Financial Protection Law” (CCFPL). The bill states that the CCFPL seeks to “strengthen consumer protections by expanding the ability of the department to improve accountability and transparency in the California financial system and promote nondiscriminatory access to responsible, affordable credit, among other purposes.”
The California bill renames the Department of Business Oversight (DBO), California’s primary regulator of consumer financial services companies to the DFPI and permits the DFPI to expand upon the DBO’s current role overseeing currently unregulated industries such as debt collection, credit reporting, and financial technology companies. Certain financial institutions licensed or chartered under other provisions of the Financial Code (and so currently regulated by the DBO) will not be subject to the CCFPL. The bill otherwise broadly defines “covered persons” under the CCFPL in a similar manner as the federal Consumer Financial Protection Act.