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AB-1048 Consumer finance protections: Department of Business Oversight: personnel.(2019-2020)

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Date Published: 03/21/2019 09:00 PM
AB1048:v98#DOCUMENT

Amended  IN  Assembly  March 21, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1048


Introduced by Assembly Member Limón

February 21, 2019


An act relating to financial institutions.


LEGISLATIVE COUNSEL'S DIGEST


AB 1048, as amended, Limón. Consumer finance protections. protections: Department of Business Oversight: personnel.
Existing law provides for the regulation of banks, savings associations, credit unions, industrial loan companies, and other financial institutions by the Commissioner of Business Oversight, and grants the commissioner specified enforcement powers in relation to those provisions.

Existing federal law, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, established the Consumer Financial Protection Bureau to regulate, among other things, the offering and provision of consumer financial products or services under the federal consumer financial laws.

This bill would state the intent of the Legislature to enact legislation that would strengthen consumer protections by creating a state level consumer financial protection entity charged with improving accountability and transparency in the financial system, providing consumer financial education, and protecting consumers from abusive financial practices. would, upon appropriation by the Legislature, require the Department of Business Oversight to hire specified staff to increase the department’s investigations of potential cases of consumer harm, as specified. The bill would make additional findings and declarations in this regard.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Following the 2008 financial crisis, Congress passed and the President signed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), which created the Consumer Financial Protection Bureau (CFPB) to enforce federal consumer finance laws and protect consumers in the financial marketplace. In the years since the passage of these major reforms, the economy has significantly recovered.
(b) Since it’s origination, the CFPB has received over 144,719 complaints from California residents regarding financial issues, including student loans, payday loans, debt collection, mortgage payments, and credit card scams.
(c) According to a 2017 report on financial services abuse complaints from military service members, 6,564 men and women in California filed those complaints -- approximately complaints—approximately 12.6 complaints per 100,000 residents -- ranking residents—ranking California 22nd in overall complaints per capita. Through CFPB enforcement actions, California received a $3,600,000 settlement from Wells Fargo for fraudulent practices that specifically targeted low-income and minority California residents.
(d) The Trump Administration has made consistent efforts to undo a number of the Dodd-Frank consumer financial protection reforms, publicly expressed opposition to the CFPB, and failed to initiate and pursue various enforcement actions.
(e) In the 2018–18 2017–18 Regular Session, the California Legislature passed Chapter 199 (Assembly Joint Resolution No. 48) urging the President and Congress to maintain the integrity of the CFPB and allow it to carry out its statutory responsibility to protect consumers from abusive financial products and practices.
(f) When consumer protection safeguards are being overlooked at the federal level in favor of financial entities, states should ensure that enforcement actions are pursued if financial violations of the Dodd-Frank Act are uncovered. Consequently, where feasible, the Legislature should enact statutory measures to protect its residents from financial abuses.
(g) It is the intent of the Legislature to enact legislation that would strengthen consumer protections by creating a state level consumer financial protection entity charged with improving accountability and transparency in the financial system, providing consumer financial education, and protecting consumers from abusive financial practices. enhancing the Department of Business Oversight’s investigation of potential cases of consumer harm.

SEC. 2.

 (a) The Department of Business Oversight shall, upon appropriation of the Legislature, hire eleven attorneys, two paralegals, and six unsworn investigators to increase the department’s investigations of potential cases of consumer harm and to enhance the capacity of the Enforcement Division within the department for that purpose.
(b) The Commissioner of Business Oversight shall prescribe the duties and fix the compensation of employees hired pursuant to subdivision (a) in accordance with classifications made by the State Personnel Board.