SACRAMENTO, Calif. — As the Trump administration continues its efforts to all but eliminate the CFPB, California has launched a new cabinet-level agency that state officials say will strengthen coordination of consumer protection and business oversight efforts, with former Consumer Financial Protection Bureau Director Rohit Chopra leading the initiative.
The California Business and Consumer Services Agency (BCSA), which officially began operations July 1, consolidates numerous existing state departments, boards and bureaus under a single cabinet-level organization. Rather than creating a new regulator, the state has reorganized existing agencies with authority over financial services, consumer protection, licensing and other regulated industries.
According to Ballard Spahr, the agency will focus enforcement on business practices that increase costs for consumers through deception, hidden fees and other unlawful conduct while improving coordination across industries that include financial services, real estate, healthcare, retail, hospitality, agriculture and higher education.
In a post on the agency’s website, Chopra said one of the BCSA’s primary objectives is addressing practices that improperly increase costs for consumers and businesses.
The ‘Key Priority’
“A key priority for the agency is to crack down on harmful and corrupt practices that wrongfully raise costs for families and honest businesses,” Chopra wrote.
He added that the agency wants companies to be transparent about their products and services while ensuring consumers have meaningful choices rather than becoming “tricked or trapped into paying inflated fees and charges for a product or service they do not want.”
According to Ballard Spahr, the agency’s enforcement authority will be exercised through the departments it oversees, many of which already have authority to pursue companies that illegally overcharge consumers or endanger the public. In some cases, those agencies may enforce both state and federal laws, and businesses found in violation could face the loss of their California operating licenses.
Chopra also said the agency plans to scrutinize undisclosed kickbacks, manipulative business practices and other forms of misconduct. He indicated enforcement efforts will focus primarily on companies posing the greatest risks to consumers rather than smaller businesses that present limited risk.
The Agency’s Agenda
Gov. Gavin Newsom said in a news release that the agency is intended to improve affordability, strengthen regulatory oversight and ensure businesses compete on a level playing field.
State officials said the agency’s agenda includes protecting consumers while supporting entrepreneurs and small businesses, as well as ensuring emerging technologies benefit Californians. The administration also said the BCSA will build on existing initiatives involving junk fees, consumer privacy, scam prevention and corporate accountability by improving coordination among state regulators.
Under the Umbrella
Departments now operating under the agency include:
- Department of Financial Protection and Innovation.
- Department of Consumer Affairs.
- Department of Real Estate.
- Department of Alcoholic Beverage Control.
- Department of Cannabis Control.
- Multiple licensing and appeals boards.
Ballard Spahr said Chopra’s appointment signals continuity with priorities he championed while leading the CFPB, where enforcement efforts frequently targeted so-called junk fees, deceptive business practices and barriers to competition in consumer financial markets. The law firm’s blog noted that Chopra’s emphasis on excessive and hidden fees in California closely mirrors initiatives he pursued during his tenure at the federal agency.
