On March 27, 2019, California Assemblywoman Monique Limón (D-Santa Barbara) stated that she plans to introduce legislation that would create a state-level version of the Consumer Financial Protection Bureau (CFPB). In a press conference, Limón argues that the goal of strengthening consumer protection can be achieved by creating a new state agency—which is being dubbed the “mini CFPB”—or by increasing the budget for California’s Department of Business Oversight.
Limón stated, “We are working to really rethink what a state CFPB would do... We see the presence of predatory lending products in auto loans, payday loans, cash advance and small business loans.”
The federal CFPB’s former Director, Richard Cordray, was also in attendance. Cordray commented:
If, at the federal level, they are pulling back, a large and important state like California can make an important difference here. If the system is not preventing massive problems and exploitation, even the people that are most careful can be hurt.
Limón chairs the state assembly’s Banking and Finance Committee.
Discussions of states beefing up consumer financial protection enforcement after President Donald Trump named Mick Mulvaney the Acting Director of the CFPB back in 2017 were widespread. This was intended as a solution to fill the gaps allegedly caused by the CFPB's lack of oversight under its new leadership. As with most things, this solution is not so simple. It has the potential to turn into what we are currently seeing in the judicial system: inconsistent, and sometimes contradictory, requirements depending on where the consumer resides and where the financial services company does business. This places hurdles in consumers’ ability to resolve past due accounts through their preferred communication channels. Regulations that provide clarity to the industry about the rules of the road are beneficial, but uniformity is important too -- both for companies and consumers.