Creating a California CFPB
In September 2020, Governor Gavin Newsom signed into law AB 1864, the California Consumer Financial Protection Law (CCFPL), which gave new consumer protection powers to California’s Department of Business Oversight, which it also renamed the Department of Financial and Consumer Protection and Innovation (DFPI). In effect, the new DFPI mirrors the Consumer Financial Protection Bureau, the federal agency created in the wake of the financial crisis to protect consumers. With the DFPI, Californians now have the nation’s strongest state agency protecting them from unfair, deceptive, and abusive practices in the financial market, including the student loan market.
The breadth of the challenges that California borrowers face cannot be understated. Their student debt casts a shadow over everything they do—affecting their ability to buy homes, save for retirement, get married, start families, pursue certain careers, start businesses, and more. Unfortunately, rampant abuses and consumer harm across the entirety of the student loan market only serve to exacerbate their struggles.
With the DFPI, California has the opportunity to change that. Already, the reconstituted agency has undertaken investigations into providers of predatory income-share agreements, a type of private student loans, and is developing a registry of education finance companies operating in the state.
Read the letter from the Campaign calling on DFPI to use all the tools at its disposal to rein in predatory practices in the student loan market.