The ink is barely dry on the California Department of Financial Protection and Innovation’s (“DFPI” or the “Department”) newly approved regulation package PRO 01-21, and DFPI has already begun to take steps to implement registration and reporting requirements for additional consumer financial services under the California Consumer Financial Protection Law (“CCFPL”). The recently approved regulations established registration and reporting requirements for four previously unregistered products and services in California – (1) debt settlement services, (2) student debt relief services, (3) private postsecondary education financing, and (4) income-based advances – and DFPI is not stopping there.
On October 28, 2024, DFPI published an Invitation for Comment, seeking stakeholders' input on what other industries DFPI should establish registration and reporting requirements for under the CCFPL. The CCFPL, established by Governor Newsom in September 2020, significantly increased the scope of business activity DFPI regulates, granting the Department the broad authority to establish these types of regulations over any entity that offers or provides consumer financial services or products to California residents. Additional affected industries could include payment processors, marketing companies, credit repair companies, other debt relief services, and more.
DFPI noted several potential rulemaking topics for comment, a few of which are posted below. These topics include new categories of registrants, oversight and reporting requirements, definitions, and economic impact (you can click here to read all of the topics and the Invitation for Comment in its entirety). Comments must be submitted by December 12, 2024.
- For what additional industries should the DFPI establish registration requirements under Financial Code section 90009, subdivision (a)?
- What consumer protection risks do those industries present to consumers that would make it appropriate to prioritize the registration of those industries over others?
- The DFPI invites stakeholders to submit examples of acts or practices in those industries that stakeholders find concerning.
- For each industry suggested for registration, what trade associations, if any, represent that industry?
Following the recent enactment of the regulation package PRO 01-21 mentioned above, DFPI is looking to expand its regulatory oversight of the consumer finance industry. We will continue to monitor developments in the rulemaking process and update you as more information is released about any proposed CCFPL regulations.
