Governor Proposes To Increase In DFPI Spending

Yesterday, Governor Gavin Newsom met the constitutional deadline for submitting a proposed budget.  Cal. Const. Art. IV, § 12(a).  The release of the budget kicks of a prolonged legislative process.  In the next several weeks, the budget committee chairs in each house  of the legislature will introduce the Governor’s budget proposal in bill form.  During this time,  the Legislative Analyst’s Office will conduct a detailed review of the budget bill and releases various reports.  The California Constitution requires the legislature to pass a budget by midnight on June 15 of each year (the fiscal year ends on June 30).  Cal. Const. Art. IV, § 12(c)(3).  If the legislature fails to do so, the Constitution prohibits any appropriation from the current budget or future budget to pay any salary or reimbursement for travel or living expenses for legislators from June 15 until the day that the budget bill is presented to the Governor.  Cal. Const. Art. IV, § 12(h).  

The Governor is proposing to add over 40 positions to the Department of Financial Protection & Innovation and increase spending by approximately 5%.   The increased positions are being allocated primarily to the department's lender-fiduciary, debt collectors and consumer financial protection programs.   The latter two programs are the result of California's enactment of the California Consumer Financial Protection Law and the Debt Collection Licensing Act, which took effect on January 1, 2021 and 2022, respectively.