California Assembly holds hearing on strengthening state oversight of financial industry
SACRAMENTO, CA – Consumer Reports called on state lawmakers today to support Governor Gavin Newsom’s proposal to create a more effective financial watchdog for consumers at a joint hearing of the Assembly Budget and Banking Committees today. Suzanne Martindale, senior policy counsel and western states legislative manager for Consumer Reports, testified that stronger state oversight is urgently needed as millions of Californians struggle with the financial fallout of the coronavirus crisis.
“So many Californians across the state have suddenly lost their jobs and become prime targets for predatory lenders and financial scam artists,” said Martindale. “That’s especially true of Black and Latinx families and small business owners who were already stretched thin before the pandemic and now bear the brunt of the current economic crisis. Governor Newsom’s proposal will help arm the state with the tools it needs to rein in unfair, deceptive and abusive financial practices and protect Californians working hard to provide for their families.”
In a letter sent to members of the Budget and Banking Committees, CR and a coalition of consumer groups urged the lawmakers to support the effort. Under Governor Newsom’s proposal, the Department of Business Oversight would be restructured and renamed the Department of Financial Protection and Innovation (DFPI). The DFPI would be strengthened with dozens of new staff charged with actively monitoring the marketplace to identify patterns of abuse and secure relief for Californians treated unfairly by financial firms. The proposal would extend state oversight to important financial industries not currently subject to state licensing and supervision, such as debt collectors, credit reporting agencies and companies marketing digital finance products.
Governor Newsom’s proposal is included as part of his proposed state budget, which must be approved by the time the legislature adjourns on August 31. It does not require lawmakers to appropriate any money from the general fund. Instead, it would use the Department of Business Oversight’s existing reserve fund from past enforcement actions to strengthen its oversight of the financial marketplace.
Michael McCauley, michael.mccauley@consumer.org, 415-902-9537