What Happened?
On May 12, 2026, California Governor Gavin Newsom announced the appointment of former Consumer Financial Protection Bureau (“CFPB”) Director Rohit Chopra as Secretary of the newly created California Business and Consumer Services Agency (“BCSA”).
The BCSA is a cabinet-level reorganization that will officially launch on July 1, 2026, consolidating a wide range of licensing, regulatory, and enforcement functions across numerous consumer-facing sectors of the California economy. These include oversight bodies such as the Department of Financial Protection and Innovation (“DFPI”), Department of Consumer Affairs, and other key regulators impacting financial services, real estate, and technology markets.
Governor Newsom framed the move explicitly as a response to the federal government’s retrenchment in consumer financial protection under the Trump administration, positioning California to “strengthen the state’s efforts to protect consumers and honest businesses” as federal enforcement is scaled back.
Chopra, who previously led the CFPB and served as a Federal Trade Commission commissioner, is widely known for aggressive enforcement initiatives targeting “junk fees,” repeat offenders, and unfair or abusive practices in consumer finance.
Why Does It Matter?
The creation of the BCSA—and the selection of Chopra to lead it signals a deliberate effort by California to function as a state-level analogue to a weakened CFPB. As federal consumer protection oversight contracts, California is positioning itself to step into the resulting regulatory vacuum.
This mirrors broader state-level trends, where states are expanding their authority and enforcement posture to address unfair, deceptive, and abusive acts and practices (“UDAAP”) in the absence of robust federal oversight. For example, as we have noted in prior posts, New York has moved to modernize its UDAAP framework in anticipation of increased enforcement and oversight of the financial services industry. California now appears poised to follow a similar path, albeit through a different structural approach.
Unlike a single regulator the BCSA is structured as a coordinating “umbrella” agency that brings together dozens of previously fragmented entities. This consolidation is designed to align enforcement priorities, streamline supervision, and enable coordinated rulemaking across industries that increasingly intersect (e.g., fintech, payments, and digital platforms).
For financial services companies, the most significant implication is the integration of the DFPI into a broader enforcement framework. The DFPI already exercises expansive authority over mortgage banking and finance lending activities and, under the California Consumer Financial Protection Law (“CCFPL”), supervises a broad spectrum of nonbank financial products, including lending, payments, and emerging fintech offerings. The new structure allows California to pursue cross-sector enforcement strategies, particularly where financial products intersect with technology platforms, data practices, or broader consumer marketplaces.
Chopra’s appointment strongly suggests that California enforcement will reflect the priorities and philosophy that characterized his tenure at the CFPB. During that time, the Bureau emphasized:
- Aggressive enforcement against “junk fees” and pricing practices;
- Scrutiny of repeat offenders and systemic compliance failures;
- Focus on unfairness and abusiveness theories, not just deception; and
- Increased attention to digital platforms, data usage, and algorithmic decision-making.
Expect these same themes to shape California’s enforcement agenda, with a particular emphasis on identifying “pattern and practice” violations affecting broad segments of consumers, rather than isolated compliance issues.
What Do You Need to Do?
In light of California’s evolving regulatory posture, financial services companies should take proactive steps to reassess their compliance frameworks with an eye toward increased state-level scrutiny.
First, companies should assume that CFPB-style UDAAP standards will remain highly relevant and ensure that policies and controls are calibrated to address unfair and abusive practices, not just deception.
Second, institutions should evaluate their operations holistically, recognizing that California regulators may take a “full lifecycle” view of consumer interactions. This includes:
- Product design and pricing;
- Marketing and disclosures;
- Servicing and communications; and
- Complaint handling and remediation practices.
Third, companies should prepare for greater inter-agency coordination within California, which may lead to:
- More complex and multi-dimensional investigations; and
- Parallel scrutiny across licensing, conduct, and consumer protection regimes.
Finally, organizations should closely monitor developments from the BCSA and its component agencies, particularly the DFPI, as enforcement priorities and rulemaking agendas begin to take shape under Chopra’s leadership.