Consumer protection bill pending in California
May 28, 2020 – Recently, legislation with significant implications to California credit unions advanced in the state legislature. The COVID-19 Homeowner, Tenant and Consumer Relief Law of 2020 (AB 2501) would require credit unions and other financial institutions to halt mortgage and auto loan payments for consumers experiencing financial hardship during the COVID-19 pandemic.
Under the bill’s provisions, consumers experiencing financial hardship during the COVID-19 emergency or 180 days after, can seek mortgage forbearance for up to 180 days, without submitting documentation of the hardship. During the forbearance period, financial institutions would be responsible for any fees and taxes associated with the property, including county taxes and insurance.
AB 2501 also requires financial institutions to pause auto loan payments for borrowers experiencing COVID-19 related hardships for up to 180 days without verification of hardship. Institutions would be barred from charging fees, penalties or additional interest beyond the amounts scheduled during the forbearance.
The California Credit Union League is advocating against the legislation, which is pending in the Assembly Appropriations Committee.
New Dep. of Financial Protection and Innovation in CA
The California Governor’s Office and the state’s Department of Business Oversight (DBO) announced a plan to overhaul the department to add a more aggressive consumer watchdog function to the agency, as well as to foster technological advancement.
According to the January issue of the department’s Monthly Bulletin, Gov. Gavin Newsom (D) has proposed a $44 million plan to modernize and revamp DBO with added staff and authority. The agency would be renamed the “Department of Financial Protection and Innovation” under the plan.
According to the publication, the action is intended to “cement” the agency’s position as a premier financial regulator “and national model for consumer protection.” Proposed legislation making the change, the California Consumer Financial Protection Law, the publication stated, would give the DBO “expanded enforcement powers to protect California consumers from the regulatory retreat by federal agencies, most notably the Consumer Financial Protection Bureau (CFPB).” The publication noted that the new law would be modeled on the CFPB, with a focus on promoting innovation, clarifying regulatory hurdles for emerging products, and increasing education and outreach for vulnerable groups.
Credit union parity bill signed
Sept. 6, 2018 — Today, California Gov. Jerry Brown (D) signed a California Credit Union League-sponsored bill, AB 2862, which updates the California state credit union charter. The measure includes five provisions to clean up the code and give state-chartered credit unions parity with federally-chartered credit unions.
The provisions include:
- Allowing state-chartered credit unions to purchase and sell whole loans.
- Allowing investments in charitable donation accounts (CDAs).
- Clearly exempting credit unions from the California escrow law.
- Authorizing investments for employee benefits plan obligations without prior approval by the California Department of Business Oversight (DBO).
- No longer requiring savings capital structure policies.
The bill is effective January 1, 2019.
Broad privacy measure gives consumers right to request data
July 10, 2018 — A sweeping privacy measure, the California Consumer Privacy Act of 2018, recently passed both the State Assembly and the Senate without any opposition and was signed into law by Gov. Jerry Brown. When it goes into effect in 2020, the law will give consumers the right to request all the data businesses are collecting on them, as well as the right to request that businesses not sell any of their data.
The law also comes with strict disclosure rules about data collected by businesses, and it empowers the California Attorney General to fine businesses for non-compliance.
The bill was passed to prevent voters from passing stricter rules in November. Californians for Consumer Privacy, a group headed by real estate developer Alistair Mactaggart, had been preparing a ballot initiative to that would have gone even further than AB 375.
State fills deputy commissioner’s job
Jan. 17, 2018 — Caitlin Sanford is the new deputy commissioner of the division of credit unions for the California Department of Business Oversight (DBO), and will take the job Feb. 1. The appointment to the position was announced by Gov. Edmund G. “Jerry” Brown Jr. Dec. 29. A user experience researcher for mobile financial services at Facebook since 2016, Sanford previously held positions for Bankable Frontier Associates, a consulting firm specializing in finance solutions for low-income people. Among her roles at the firm were director of consumer insights, acting director and associate. Prior that, she was a research intern at the World Bank in Brazil, and a program assistant at the United Nations Poverty Environment Initiative in Panama and in Kenya.
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