Bloomberg Law
Sept. 2, 2020, 7:47 PM UTC

California’s ‘Mini-CFPB’ Law May Extend to Small Business Loans

Lydia Beyoud
Lydia Beyoud
Fintech & Regtech Reporter

Tucked into California’s new law to expand its financial watchdog’s enforcement powers over consumer financial products is a provision that could extend to online small business lenders.

The bill, headed to Gov. Gavin Newsom (D) for his signature after legislative approval Monday, would transform the Department of Business Oversight and expand its ability to charge companies engaged in certain categories of misconduct, called unfair, deceptive, or abusive acts or practices (UDAAP). It’s modeled after the Consumer Financial Protection Bureau’s UDAAP enforcement authority.

The legislation gives the department the option to regulate nonbank small business lenders—many of them fintech companies—but doesn’t ...

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