Sacramento - The nation’s premier state consumer financial protection agency just gained clear and timely authority to protect California consumers. By signing SB 825, authored by Senator Monique Limón (D–Santa Barbara) and Senator Timothy Grayson (D–Concord), Governor Newsom built on his 2020 initiative to reimagine how California protects families and small businesses from predatory lending and other unfair financial practices. In light of the attack on the Consumer Financial Protection Bureau at the federal level, this law will ensure that California’s Department of Financial Protection and Innovation (DFPI) has the authority it needs to help fill the vacuum. The new law clarifies DFPI's authority to protect consumers and businesses from unfair, deceptive, or abusive acts and practices (UDAAPs).
“Having a fully-empowered DFPI provides a measure of hope and confidence at a time when the federal government is doing all it can to remove oversight from the financial sector,” said Ted Mermin, executive director of UC Berkeley Law’s Center for Consumer Law and Economic Justice. ‘When we envisioned the revamped Department in 2020, it was precisely to ensure that California had the ability to step up at a time like this.”
“DFPI is on the front lines of protecting consumers, workers, and small businesses against corporate abuses at a time when families are increasingly struggling to keep up with rising costs,” said Seth Frotman, Senior Fellow at the Center for Consumer Law & Economic Justice, former general counsel of the CFPB, and one of the drafters of DFPI’s enacting legislation. “With this legislation, California and DFPI has provided the roadmap every state should follow to ensure that it has the tools and authorities to stand up for working people that have too often been ripped off by junk fees, predatory practices, and unscrupulous businesses that help fuel the affordability crisis .”
The Center salutes the Governor and the bill’s authors and sponsors for responding so effectively at this critical moment.