Three California laws that affect fintech companies will go into effect on January 1, 2021. The California Consumer Financial Protection Law (CCFPL) expands the scope of the Department of Business Oversight’s (DBO) current regulatory and enforcement powers, and renames it as the Department of Financial Protection and Innovation (DFPI). The Debt Collection Licensing Law (DCLL) requires, among other things, that persons engaged in the collection of consumer debts, including first- and third-party debt collectors and debt buyers, obtain a license from the DFPI. The Student Loan Borrower Bill of Rights gives the DFPI broader authority to regulate student loan servicers, including depository institutions and servicers of federal student loans, in addition to providing consumers with a private right of action to enforce the law’s substantive requirements.
For example: The DFPI Will Have the Resources to Hit the Ground Running California will appropriate at least $10 million in additional funding to the DFPI each of the next three fiscal years. Beginning in the 2023-24 budget cycle, the DFPI will be funded exclusively through the licensing fees discussed above and from the civil penalties it collects in connection with enforcement actions. This funding mechanism gives the DFPI the ability to act quickly and the incentive to utilize its enforcement powers. The DFPI’s self-funding mechanism also insulates the agency from pressure that otherwise could have been brought to bear on the agency through the political process. To read more click here