California Consumer Financial Protection Law
Protecting consumers, fostering innovation
Here at the California Department of Financial Protection and Innovation (DFPI), we care about the communities we serve. Consumers turn to us to help them make decisions about financial products and services and licensees trust us to help them stay up to date on the law.
Taking effect Jan. 1, 2021, the California Consumer Financial Protection Law (CCFPL) will expand our enforcement powers to protect California consumers from pandemic-inspired scams, promote innovation, clarify regulatory hurdles for emerging products and increase education and outreach for vulnerable groups.
The new law embodies Governor Gavin Newsom’s plan to modernize and revamp the former Department of Business Oversight (DBO) with the added staff and authority necessary to cement its position as a premier financial regulator and national model for consumer protection. The law was enacted in AB 1864 by Assemblywoman Monique Limón, D-Santa Barbara.
“We have already seen an increase in predatory financial lending and scams as the most vulnerable in our state try to weather the economic downturn induced by the COVID-19 pandemic,” DFPI Commissioner Manuel P. Alvarez said. “This legislation will allow us to increase consumer protections without imposing undue burdens on honest and fair operators.”
“In addition, it will help us cultivate financial innovation, and allow the department to track and regulate emerging financial products so we can serve consumers and licensees in a more meaningful and efficient way.”
The CCFPL gives the Department expanded authority and resources to:
- Restore financial protections that have been scaled back at the federal level.
- Protect consumers from predatory businesses, without imposing undue burdens on honest and fair operators.
- Spur innovation in financial services by clarifying regulatory expectations for emerging products and services.
- Extend state oversight to important financial-services providers not currently subject to state supervision.
- Increase public outreach and education, especially for vulnerable populations.
What does this mean for consumers?
The California Consumer Financial Protection Law gives the Department of Financial Protection and Innovation increased oversight over financial services not currently subject to the department’s regulatory oversight.
This includes new regulatory powers to protect consumers from unfair, deceptive, or abusive practices committed by currently unlicensed financial services or products. We also now have authority to oversee previously unregulated industries, including debt collectors, rent to own contracts, consumer credit reporting agencies, credit repair agencies and others.
We’re here to help. To file a complaint, please see the “File a Complaint” tab at the top of our homepage. All complaints must be filed electronically through our website. If you have questions, you can reach us toll free at 1-866-275-2677.
Our name change to the Department of Financial Protection and Innovation (DFPI) is effective immediately and we are working to update all the templates, forms, and logos in our system. In order to keep business moving and better serve the consumers and businesses we regulate, some documents may continue to have the DBO name and logo during this transition period. Please be aware that all letters and documents with either the DBO or DFPI name or logo have the full force of law. All emails and phone calls to DBO are being referred automatically to DFPI so your communication with our department is not being lost.
References and additional information:
- AB 1864: http://leginfo.legislature.ca.gov/faces/billVersionsCompareClient.xhtml?bill_id=201920200AB1864
- California’s Legislature Approves Consumer Protection Bills (American Banker, September 1, 2020)
- California Lawmakers Approve Budget Proposal to Create Financial Watchdog for Consumers (Consumer Reports, September 1, 2020)
- California Seeks New Fintech Regulation in Agency Overhaul (Bloomberg, January 10, 2020)
Key Consumer Links
Approved by Jim Sweeney 1/2020