Fintech: California Pushes New Fintech Regulations
Gavin Newsom plans to spend more money on regulations
The State of California could soon overhaul the regulatory oversight of financial technology companies. Governor Gavin Newsom released details of his 2020-2021 budget. Inside, the proposal includes a provision to make the California Department of Business Oversight as the regulator of fintech companies. The agency would also regulate debt collectors, credit reporting agencies, and other firms tied to consumer finance.
The state would rename the agency of the Department of Financial Protection and Innovation (DFPI). In addition to regulatory efforts, the new agency would aim to increase innovation across the state.
State of California and Fintech Oversight
The remodeled agency would have expanded powers to address “abusive” acts or financial practices. It would also focus on identifying and policing unfair and deceptive acts and practices (UDAP).
The state of California has made this proposal as a direct response to Newsom’s belief that the Federal government hasn’t done enough to address consumer protection. Newsom believes that the Trump administration has limited government oversight and reduced the efficiency of the Consumer Financial Protection Bureau.
“They’re getting out of the financial protection business. We’re getting into it,” Newsom said at a press conference.
“We’re going to protect consumers from unfair and deceptive practices better than we have,” he later said.
The new department would also have a four-person panel dedicated to fintech innovation. It would also aim to liberalize banking laws that would allow fintech firms to operate across the United States while still reporting to the Department of Business Oversight.
Newsom’s press conference on Friday lasted nearly three hours as he outlined the state’s $222 billion budget. Newsome referenced President Donald Trump repeatedly during the speech. He mentioned Trump on every policy issue, including healthcare, climate change, school lunches, and homelessness. Newsom also argued that California aims to assert itself and address the things that he believes the Federal government cannot.
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