On February 4, 2021, the California Department of Financial Protection and Innovation (DFPI or the Department) issued an invitation for stakeholder comments on potential rules that will govern the operations and authority of the Department. This invitation is the first opportunity for industry participants to weigh in on the functions of the DFPI—a newly reconstituted regulator whose oversight will significantly affect many financial services companies operating in California.
The DFPI (formerly known as the Department of Business Oversight) was established by the California Consumer Financial Protection Law (CCFPL), which was enacted last September. In addition to renaming and reorganizing one of California’s financial regulators, the CCFPL grants the DFPI authority very similar to that granted to the CFPB under the Dodd-Frank Act, including expanded regulatory and enforcement powers. And while many licensees are exempt from these new authorities—e.g., mortgage lenders licensed under the state’s Real Estate Law—uncertainty around their scope and implementation should lead all potentially relevant market participants to monitor and consider participating in the rulemaking process.
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