California Governor Gavin Newsom has appointed former CFPB Director Rohit Chopra to be the inaugural Secretary of a new cabinet-level agency that he created last year — the Business and Consumer Services Agency (“BCSA”). Although the appointment must be confirmed by the California Senate, the move is already generating significant attention within the financial services industry because it may signal California’s intent to assume a substantially larger role in consumer financial regulation and enforcement at a time when many expect reduced federal regulatory activity.

Chopra’s appointment is not for a particular term; rather, he will serve at the will of the Governor. 

The BCSA, spun off from the Business, Consumer Services and Housing Agency (BCHS) in July 2025, along with the California Housing and Homelessness Agency (CHHA),  will officially become operative on July 1, 2026, and will oversee a broad collection of California regulatory departments, including the Department of Financial Protection and Innovation (“DFPI”), Department of Consumer Affairs, Department of Real Estate, Department of Alcoholic Beverage Control, and the Department of Cannabis Control.  While its exact staffing and budget are unclear, the BCHS employed over 8.000 employees and had an operating budget of over $4.6 billion before being split into the BCSA and CHHA. 

While some early press coverage has characterized the BCSA as a “California CFPB,” the actual structure is somewhat more nuanced. The DFPI is not being merged into the new agency or stripped of its existing authority. Rather, the BCSA will function as an umbrella cabinet agency sitting above several existing departments, with Chopra serving in a strategic supervisory role.

That distinction matters because the DFPI already possesses extensive powers under the California Consumer Financial Protection Law (“CCFPL”), including authority to regulate, supervise, investigate, and bring enforcement actions against a wide range of financial services providers. The DFPI also already has substantial rulemaking authority.

As a result, Chopra’s influence may prove highly consequential even though BCSA itself does not possess standalone substantive rulemaking authority comparable to the CFPB.

What Powers Will Chopra Have?

Based on the Governor’s announcement and the current statutory structure, Chopra will likely exercise significant influence over:

  • statewide consumer protection priorities;
  • interagency coordination;
  • regulatory initiatives;
  • enforcement strategy;
  • licensing and supervisory priorities;
  • multi-agency investigations;
  • online privacy and consumer data protection; and
  • California’s response to perceived federal regulatory retrenchment.

Although formal rulemaking authority will remain with the underlying departments, especially the DFPI, Chopra is expected to play a central role in shaping which regulations are proposed and aggressively pursued.

In practical terms, the financial services industry should expect continued California activity involving:

  • fintech regulation;
  • earned wage access products;
  • buy now/pay later products;
  • algorithmic decision-making and AI;
  • consumer data practices;
  • junk-fee initiatives; and
  • UDAAP-style enforcement theories under California law.

Enforcement Authority

The DFPI already possesses extensive enforcement authority, including the ability to investigate entities, issue administrative orders, seek civil penalties, pursue restitution, and file civil actions.

Accordingly, even though Chopra will not personally function as the direct enforcement official, his appointment almost certainly signals a more coordinated and potentially more aggressive statewide enforcement posture.

Indeed, one of the most important practical consequences of the reorganization may be the increased coordination among agencies that historically operated more independently. The creation of a cabinet-level structure above the DFPI and related departments may facilitate broader cross-industry investigations and policy initiatives.

Why This Matters Nationally

The significance of this development extends well beyond California.

Because California’s economy is so large, actions taken by California regulators frequently shape national business practices. Financial services providers often choose to implement California-compliant practices nationwide rather than maintain separate operational systems.

Moreover, Chopra’s appointment comes at a time when many observers anticipate a less aggressive federal regulatory environment. California may therefore increasingly position itself as a leading state-level counterweight in consumer protection regulation and enforcement.

For banks, fintechs, payment companies, marketplace lenders, and other consumer financial services providers, the practical takeaway is straightforward: California’s regulatory influence is likely to expand greatly.

The combination of the DFPI’s already broad statutory authority and Chopra’s aggressive regulatory philosophy will likely make California an even more consequential consumer financial regulator in the country over the next several years.

Although there has been no official announcement, it appears that Chopra will no longer head the new Consumer Protection and Affordability Group which was organized by the Democratic Attorneys General Association.  

Chopra’s appointment is not for a particular term, rather, he will serve at the will of the Governor. Since Governor Newsome’s term expires early in January of next year, Chopra could be removed by the next Governor. If the next Governor is a Democrat, Chopra would likely be able to continue serving in 2027. 

This appointment establishes Chopra as someone who will be close to Newsome if and when he runs for President. If Newsome were to be elected as the next President, Chopra might be well-positioned to be appointed to a cabinet or other senior position in Newsome’s Administration.