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Consumer Reports’ on proposed rulemaking under the California Consumer Financial Protection Law

In this comment, CR recommends that the DFPI do the following:

  • Registration should be prioritized for providers that pose a high risk of harm to consumers using four factors.
  • Vetting of registrants should consider information similar to that used in other licensing statutes administered by the Department.
  • The DFPI should require that records be retained in a form electronically usable by the DFPI for 5 years after the later of the end of the customer relationship or the last contact with the consumer.
  • We recommend that the DFPI define a timely complaint response as a responsible complaint response.

Additionally, CR does not recommend defining UDAP or abusiveness by rule at this time, and we note that this is not necessary to the DFPI’s exercise of its UDAP or abusiveness authority.  We do not believe that disclosures are likely to be the best form of consumer protection. Where they are used, disclosures should be rigorously user tested to see if it in fact can shape consumer expectations, and this is where DFPI resources should be allocated.