Richard Cordray's resignation last fall as head of the federal Consumer Financial Protection Bureau may result in more stringent regulation of California Finance Lenders. In February, Assemblymember Monique Limón introduced AB 2984 as a "spot bill" that made a nonsubstantive change to the definition of "credit union" in the Financial Code. Last month, the gloves came off as she gutted the bill and amended it to impose tougher regulation of lenders under the California Financing Law (fka Finance Lenders Law).
Among other things, the bill would require the Commissioner of Business Oversight to examine a licensee at least once every 48 months at the licensee's expense. The bill would also increase potential civil and administrative penalties and empower the Commissioner to obtain the appointment of a receiver and order restitution.
Assembly Committee on Banking and Finance's analysis lays the need for bill on Richard Cordray's departure:
"Mr. Cordray left the CFPB in November 2017 and was replaced by Mick Mulvaney, who is currently serving as Acting Director of the Bureau. Mulvaney is dogmatically opposed to the core mission of the Bureau to regulate financial markets and protect consumers. Under the control of Mulvaney, the Bureau has ceased to enforce the law."
If the bill makes it too Governor Brown's desk, its future may be bright as it already has the support of the Department of Business Oversight.