On April 2, the California Senate Banking and Financial Institutions Committee voted to move forward with legislation that would expand the DFPI’s powers to oversee businesses traditionally governed by the CFPB. The bill, SB 825, passed on a 5-2 party-line vote and moves next to the Senate Judiciary Committee.
Under existing law, DFPI must rely on federal authority and consult with the CFPB to pursue enforcement actions against certain state-licensed financial institutions. According to the state’s analysis, the proposed legislation would eliminate major DFPI enforcement exemptions for state-licensed businesses and allow DFPI to independently pursue UDAAP violations against licensees of the department without federal coordination — including, among others, state-chartered banks, credit unions, mortgage lenders, and escrow agents.
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