Things are moving fast and furious in California as state lawmakers are attempting to create their own version of the Consumer Financial Protection Bureau. While much of the details are still in the air, it does appear as though there is enough momentum to get something done by the end of the month. Some of those details that are still in the air, though, are major details, such as whom the new regulator will actually have the ability to regulate.
Whether there was enough money and time for the state to create a Department of Financial Protection has been the “will they or won’t they” story for several months. The on again, off again nature has led to many stops and starts along the way, but now it appears there is more momentum than ever, according to a published report.
The state legislature has until the end of this month to finalize its budget and there is still a lot of horse-trading to be done, including determining who would be subject to the new regulator’s purview. The California Bankers Association, for example, says it supports the creation of a new regulator to keep an eye on some of its members’ online lending competitors, but wants its members themselves to be exempt from the new regulator’s oversight because they are already “heavily regulated” at the state and federal level.
A number of outlets have picked up a report that originated at NPR updating the status of the effort to create the Department of Financial Protection. That report talked about the broader power the state would have to “police” a number of industries. The first one mentioned? “Aggressive debt collectors.”
Richard Cordray, the former director of the Consumer Financial Protection Bureau, has been consulting with lawmakers about the bill. Lawmakers in California are pushing to create the regulatory agency to offset what is perceived to be a decrease in the enforcement activity from the CFPB, according to the report.
“We are now as states left to do the work ourselves,” says California Assembly member Monique Limón.