DFPI Monthly Bulletin: October 2020

The October 2020 DFPI Bulletin focuses on a name change for the department and commercial financing regulations.

The California Department of Financial Protection and Innovation (DFPI), formerly known as the Department of Business Oversight (DBO), supervises, licenses and regulates a variety of financial institutions, including some real estate mortgage loan originators (MLOs) holding a Nationwide Multistate (or Mortgage) Licensing System and Registry (NMLS) license. Alongside the California Department of Real Estate (DRE), the DFPI shares the responsibility for overseeing MLOs depending on their license use.

Read on for the latest announcements from the DFPI.

Governor Newsom renames Department of Business Oversight

A shakeup is brewing at the DBO.

Governor Gavin Newsom signed A.B. 1864 into law on September 25, 2020 to revamp and modernize the department. The transition begins with a name change aimed at cementing its position as a leading financial regulator and model for consumer protection.

The bill, also known as the California Consumer Financial Protection Law (CCFPL), renames the DBO to the Department of Financial Protection and Innovation (DFPI), effective September 29, 2020.

Beginning January 1, 2021, the new law expands DFPI powers to protect California consumers from pandemic-inspired scams and allows some regulatory federal agencies to step back, including the Consumer Financial Protection Bureau (CFPB).

Further, the DFPI will:

expand the state’s consumer protection capacity by adding additional investigators and attorneys to supervise financial institutions and crack down on financial predators;
create a team to monitor financial markets for emerging risks to consumers;
create a team committed to consumer education, outreach, listening and responding to consumers in specific communities; and
implement a new Office of Financial Technology and Innovation, dedicated to cultivating financial technologies that serve consumers.

The new website address for the DFPI is dfpi.ca.gov.

Speak out: DFPI seeks comments on commercial financing regulations

The DFPI is seeking public comment on initial proposed text for Senate Bill 1235 (SB 1235). The bill would require lenders and other commercial financing companies to provide clear and consistent disclosures to small business owners.

Chapter Eleven of SB 1235 established the nation’s most extensive set of protections for small business borrowers and directed the Department to adopt regulations implementing the disclosure requirements in 2018.

Comments may be emailed to regulations@dfpi.ca.gov by October 28, 2020.