A California bill that would create a powerful state agency fashioned after the federal Consumer Financial Protection Bureau has made a comeback with the support of small businesses and fintech firms that want expanded protections during the coronavirus pandemic.
But most financial institutions are trying to stop the bill because it would expand the state’s enforcement powers, potentially increasing fines and compliance costs.
Gov. Gavin Newsom’s plan to expand oversight of all financial services companies in California was inserted back into a final budget bill that legislators must pass by Aug. 31. The plan, which some are calling a “mini-CFPB,” initially had been dropped from a budget bill in June.
The proposal would replace the state’s existing Department of Business Oversight with a new agency called the Department of Financial Protection and Innovation, equipped with powers resembling those of the CFPB.
The plan would, among other things, expand consumer protections