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Committee advances bill letting California enforcement agency pursue consumer finance claims without CFPB sign‑off
Summary
SB 825 would let the Department of Financial Protection and Innovation (DFPI) bring unfair, deceptive or abusive practices (UDAAP) claims against its state licensees under state law rather than routing such actions through the federal Consumer Financial Protection Bureau. Supporters said the change is procedural and preserves state enforcement if
Senator Limon told the Senate Committee on Banking and Financial Institutions that SB 825 would ensure California’s financial regulator can enforce consumer financial protection laws without needing federal authorization or review. "Without an active consumer protection effort at the federal level, Californians will turn to the state for help," Limon said, and the bill would allow the Department of Financial Protection and Innovation (DFPI) to bring UDAAP claims against its own licensees directly under state law.
Andrew Kushner of the Center for Responsible Lending said the measure "simplifies the state DFPI’s authority to remedy legal violations against California consumers" and emphasized that, as drafted, the bill would not impose new liabilities but would change the procedural pathway so DFPI would not have to notify or rely on the CFPB before pursuing enforcement against state‑licensed entities.
Several consumer advocates and nonprofit organizations testified in support, including the California Low Income Consumer Coalition, National Consumer Law Center, RISE Economy, and the Consumer Federation of California. They argued the change would allow California to act if federal enforcement priorities shift.
Opponents voiced constitutional and policy concerns that the bill would rework compromises made when DFPI and the California Consumer Financial Protection Law were established in 2020. Indira McDonald of the California Mortgage Bankers Association said the 2020 compromise exempted certain licensed entities from the law’s scope and warned SB 825 could duplicate or expand enforcement remedies against licensees beyond existing licensing statutes and the attorney general’s authority.
Committee members debated whether the bill merely clarifies authority DFPI already has or meaningfully changes the enforcement process. DFPI supporters said the practical change is removing the requirement to involve the CFPB in state actions, which could be decisive if the CFPB declines or seeks to intervene. Vice Chair Nilo and others sought clarifications on the bill’s reach and on how it would interact with existing state licensing enforcement frameworks.
Senator Richardson moved the bill. The committee voted to pass SB 825 and re‑refer it to the Committee on Judiciary. Roll call recorded five ayes and two nos; the chair announced the bill "gets out."
