On 31, 2020, the California legislature passed the California Consumer Financial Protection Law (CCFPL) august. What the law states reflects Governor NewsomвЂ™s eyesight of a more powerful banking agency with new registration authority, UDAAP authority mirroring the authority for the CFPB, and expanded enforcement authority. But crucial amendments adopted by the legislature will exempt many regulated entities through the range for the legislation and certainly will impose restrictions in the Department that is new of Protection and InnovationвЂ™s (DFPI) workout of the authority.
We talk about the reorganization and expansion associated with the banking regulator that accompanies the true title change towards the DFPI inside our companion client alert. We highlight the important thing conditions regarding the CCFPL below.
Concentrate on Customer Protection
Although the majority of the CCFPL comes straight from Dodd-Frank Act Title X, the statutory function varies through the function and objectives of Dodd-Frank. The legislative findings assert that вЂњlack of [a dedicated economic solutions regulator with broad authority over providers of financial loans and solutions] has left customers in danger of abuse and forced California organizations to compete with unscrupulous providers.вЂќ They relate to UDAAP and also to discriminatory methods times that are multiple. In addition they relate to innovation that is technological вЂњoffers great promise,вЂќ but additionally вЂњposes risks to consumer and challenges to police force.вЂќ
In comparison, the goals of Dodd-Frank Title X are much more balanced, talking about protecting customers from UDAAP and discrimination, but additionally: (a) the necessity for customers to possess prompt and understandable information to make accountable decisions; (b) the requirement to reduce unwarranted regulatory burdens; (c) constant enforcement of federal consumer monetary legislation to advertise reasonable competition and transparency; and (d) efficient procedure of areas for customer lending options and solutions.