Financial Services Report, Spring 2020

04 Mar 2020

Punxsutawney Phil didn’t see his shadow, so we’re expecting an early spring. Maybe that’s why mini-CFPBs are sprouting or expanding on both coasts. Governor Cuomo announced several key measures impacting financial services companies in his State of the State address. Among other initiatives, Governor Cuomo indicated he would propose legislation giving the NY DFS authority to license and examine debt collectors, and UDAAP authority mirroring the CFPB’s authority granted by Dodd-Frank Title X, expanding the entities required to pay for examinations and increasing penalties for illegal conduct.

Not to be outdone, Governor Newsom announced his plan to create a mini-CFPB by greatly expanding the authority of the California banking regulator. This plan includes a new name – the Department of Financial Protection and Innovation (DFPI) – new authority to license and examine debt collectors and other previously unlicensed financial services providers, and a new law (the California Consumer Financial Protection Law) that would give the regulator UDAAP authority mirroring the CFPB’s authority granted by Dodd-Frank Title X and expanded enforcement authority. Governor Newsom’s proposal also would create a new Financial Technology Innovation Office, and his proposed budget includes funds for increased staffing for the DFPI.

Former CFPB Director Richard Cordray has been making the rounds, talking to legislators about their ability to become influential policymakers in this area. Governor Newsom specifically called out the Trump administration in identifying the need for the California agency’s expanded scope and authority. More developments to come as these proposals make their way through the New York and California legislatures.

In the meantime, get ready for spring and read ahead for all the developments in Beltway, Operations, Mortgage, Privacy, TCPA, AML/BSA, and the rest of our Reports.

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