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DFPI seeks fee increases as agency warns of looming shortfall; LAO urges short term approval and monitoring
Summary
The Department of Financial Protection and Innovation told the subcommittee that statutory fees have lagged rising costs and expanded responsibilities, leaving its financial protection fund at risk. The department seeks statutory fee changes to stabilize the fund; the LAO recommended a time‑limited approval with required reporting.
The Department of Financial Protection and Innovation (DFPI) told Senate Budget Subcommittee No. 4 it needs statutory fee authority changes to avoid insolvency of its Financial Protection Fund. DFPI staff said long‑stagnant statutory fees, expanded regulatory responsibilities and rising operational costs have produced a structural deficit.
DFPI Chief Deputy Commissioner Suzanne Martindale said the agency is primarily special‑funded and that historical fee schedules—some dating back decades—have not kept pace with workload and inflation. DFPI said it commissioned Crowe LLP to analyze program sustainability; DFPI and Department of Finance officials said that without fee changes the fund could reach a negative balance in FY2025–26 and materially worsen in subsequent years.
LAO recommendation…
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