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Last week, the California Department of Financial Protection and Innovation (DFPI) announced that it had entered into “a landmark agreement” with Meratas, Inc., a company that acts as a program manager of Income Share Agreements (ISAs) used to finance postsecondary education and training.  The agreement includes the DFPI’s finding that ISAs made solely for the purpose of financing a postsecondary education are “student loans” under the SLSA.… Continue Reading

For the second time in two years, the U.S. Supreme Court is being asked to decide whether the Federal Arbitration Act (FAA) preempts California law (the “McGill Rule”) which invalidates arbitration agreements that waive the right of consumers to seek public injunctive relief.  This time, however, there are changed circumstances that increase the odds that the Court will grant review of this critically important arbitration issue.… Continue Reading

The California Department of Financial Protection and Innovation (DFPI) has issued modifications to its proposed regulations to implement SB 1235, the bill signed into law on September 30, 2018 that requires consumer-like disclosures to be made for certain commercial financing products, including small business loans and merchant cash advances.

SB 1235, codified at CA Financial Code (Code) sections 22800-22805, requires a “provider,” meaning a person who extends a specific offer of “commercial financing” as defined in Code section 22800(d) to a recipient, to give the recipient certain disclosures at the time the provider extends the offer. … Continue Reading

The California Consumer Financial Protection Law (CCFPL) became effective on January 1, 2021.  The CCFPL gives the California Department of Financial Protection and Innovation (DFPI) (the new name given to the state’s Department of Business Oversight) broad jurisdiction and sweeping new authorities that closely resemble those of the CFPB.  As a result, the DFPI has been labeled a “mini-CFPB.”… Continue Reading

On November 4, 2020, California voters approved of the ballot initiative Proposition 24, more commonly known as the California Privacy Rights Act (the “CPRA”).  The CPRA goes into effect on January 1, 2023, and will expand several of the existing protections in the California Consumer Privacy Act (the “CCPA”).

As background, the original CCPA emerged in 2018 as a compromise between legislators and the advocacy group, Californians for Consumer Privacy, which had secured a ballot measure vote for its proposed privacy law. … Continue Reading

On September 25, 2020, California Governor Gavin Newsom signed several consumer protection bills, including AB 3254, which extends the right to receive a translated version of certain consumer contracts to nonparty signatories, such as guarantors or cosigners.

Under existing law, a business negotiating a covered contract in Spanish, Chinese, Tagalog, Vietnamese, or Korean (the five most common non-English languages spoken in California) must provide the consumer with a translated version of the contract. … Continue Reading

This past Friday, California Governor Newsom signed into law three bills that will significantly impact consumer financial service providers in the state.  One of those bills is AB-1864 which contains the California Consumer Financial Protection Law (CCFPL).  In addition to giving a new name to the state’s Department of Business Oversight which is renamed the Department of Financial Protection and Innovation (DFPI), AB-1864 gives the renamed agency broad jurisdiction and sweeping new authorities that closely resemble those of the CFPB, leading many to label the renamed agency a “mini-CFPB.” … Continue Reading

Earlier this month, the California legislature passed three bills that will significantly impact consumer financial service providers in the state.  AB-1864 creates the Department of Financial Protection and Innovation (DFPI), widely named a “mini-CFPB” because of its broad jurisdiction and sweeping new authorities that closely resemble those of the CFPB.  The two other major bills are SB-908, which will require debt collectors to be licensed in California, and AB-376, which establishes a Student Loan Borrower Bill of Rights. … Continue Reading

On September 3, 2020, the California Department of Business Oversight (DBO) announced that it has launched a formal investigation into whether Wheels Financial Group, LLC d/b/a LoanMart, formerly one of California’s largest state-licensed auto title lenders, “is evading California’s newly-enacted interest rate caps through its recent partnership with an out-of-state bank.” … Continue Reading

On February 7, 2020, the California Attorney General’s (AG) Office released modifications to the proposed regulations to the California Consumer Privacy Act (CCPA).  The modifications incorporate amendments to the CCPA signed into law after the AG’s Office issued the proposed regulations in October 2019.  The modifications also reflect public comments made during the initial comment period, which concluded in December 2019. … Continue Reading