A California proposal meant to create a powerful state agency designed after the federal Consumer Financial Protection Bureau (CFPB) has made a comeback but with small businesses and fintech firms’ support. Basically, the proposal wants to achieve expanded consumer protections. The bill was introduced in January by Gov. Gavin Newsom in his plans to expand oversight of all financial service providers in California. The proposal was dropped from a budget bill back in June. However, it has been revived and inserted back into a final budget bill that legislators were required to pass by August 31.
Californi a ’s proposal for it s ow n CFP B back on Track
Gov. Newsom’s plan is meant to replace or remake the state’s existing Department of Business Oversight with a new agency referred to as the Department of Financial Protection and Innovation, with powers similar to those of the CFPB. The bill would authorize the state’s financial regulator to:
• Focus on unregulated products to stamp out predatory practices. • License and examine debt collectors, credit bureaus, and fintech companies. • Conduct research to craft new regulatory policies. • Seek to empower disadvantaged groups in making financial decisions. Opposers
However, the proposal faces a lot of resistance from financial institutions citing the bill would expand the state’s enforcement powers and potentially increase fines and compliance costs. Several bank and financial services trade groups recently were making a last-ditch effort to kill the proposal.
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The Power Is Now Magazine | OCTOBER 2020
