The new California Consumer Financial Protection Law (CCFPL) renames the DBO the Department of Financial Protection and Innovation (DFPI) and gives the Department expanded enforcement powers to protect California consumers from pandemic-inspired scams and a regulatory retreat by some federal agencies, most notably the Consumer Financial Protection Bureau (CFPB). The new law also is designed to promote innovation, clarify regulatory hurdles for emerging products and increase education and outreach for vulnerable groups.

“This new law will significantly increase consumer protections at this critical time without imposing undue burdens on honest and fair operations,” DFPI Commissioner Manuel P. Alvarez said. “In addition, it will cultivate and engage innovation, while modernizing our operations so that we may serve consumers, licensees, and all Californians more meaningfully and efficiently.”

Effective Jan. 1, the new law gives the Department new regulatory powers to protect consumers from unfair, deceptive, or abusive practices committed by currently unlicensed financial services or products. The name change took effect immediately upon the signing of a companion measure, AB 107.

In addition, the governor’s proposal:

• Creates a Division of Consumer Financial Protection to supervise those financial services not now regulated by the department. The new division will include a market monitoring and research arm, and expanded consumer outreach targeted to vulnerable populations such as students, new Californians, military personnel, and senior citizens.
• Creates an Office of Financial Technology Innovation that will engage with new industries and consumer advocates to encourage consumer friendly innovation and job creation in California.

The expansion includes 90 additional employees to be hired over three years to focus on the new activities. The added staff will be financed from department reserves for the first three years. After that, the department projects increased annual costs of $19.3 million.