On March 23, the California Department of Financial Protection and Innovation (DFPI) responded to a request for an interpretative legal opinion as to whether the virtual currency services offered by a company require it to obtain a license under the California Money Transmission Act (MTA).
Continue Reading DFPI: Virtual Currency Platform is not Money Transmitter
On March 7, a Chicago-based FinTech company filed a Complaint for Declaratory and Injunctive Relief in Los Angeles County Superior Court against the Commissioner of the California Department of Financial Protection and Innovation (DFPI), Clothilde Hewlett.
Continue Reading Fintech Flips Script, Sues California Regulator Over 36% Rate Cap Law
On February 11, the California DFPI issued an opinion letter in response to an EWA provider’s request for a specific ruling from the DFPI about whether the company’s EWA solution is subject to licensure under the California Financing Laws (CFL) and California Deferred Deposit Transaction Law (CDDTL). In response, the DFPI concluded that the provider does not originate or facilitate loans subject to the CFL or CDDTL, and that neither the provider nor its employer partners are subject to the CFL or CDDTL’s licensing requirements.
Continue Reading DFPI Approves EWA Provider
In two unrelated settlements, the California DFPI and Georgia attorney general each recently settled with rent-to-own companies. In the California settlement that was announced on January 10, the DFPI settled with a Los Angeles-based rent-to-own furniture provider for overcharging consumers late payment fees and failure to provide consumer disclosures required under the California rent-to-own law, the Karnette Rental-Purchase Act, in violation of the California Consumer Financial Protection Law (CCFPL). Among other things, the company failed to:
Continue Reading California and Georgia Reach Settlement with Rent-to-Own Companies
Pursuant to Financial Code section 22159(a), all DFPI California Financing Law licensees are required to submit the annual report on or before March 15, 2022, even if the licensee had no business activity in the calendar year 2021. Failure to submit the annual report by the due date will result in penalties pursuant to Financial Code section 22715(b).
Continue Reading DFPI Reminds Licensees to Submit Annual Reports by March 15
On December 14, the California Department of Financial Protection and Innovation (DFPI) announced that it entered into a consent order with an LA-based auto title lender to resolve allegations that the company violated California’s the Fair Access to Credit Act’s (FACA), which prohibits making loans of $2,500 to $10,000 with interest rates greater than 36 percent. The focus of the consent order was the auto title lender’s partnership with a Utah state-chartered bank to provide the bank with marketing and servicing services in connection with auto title loans offered to California consumers. The company offered these services at the same time that FACA amended the California Financing Law to prohibit licensed lenders from making loans with principal amounts of $2,500 to less than $10,000 with interest rates greater than 36 percent, plus the federal funds rate. The company was served a subpoena seeking documents and information last year to assess whether the company was evading California’s newly enacted interest rate caps through a partnership with the out-of-state bank. After the investigation, the company ceased marketing auto loans of less than $10,000 to California borrowers.
Continue Reading DFPI Issues Consent Order to Auto Title Lender
On December 16, the DFPI announced that it is extending the deadline for CFL licensees to transition onto NMLS until March 15, 2022. CFL licensees not on NMLS may now
Continue Reading DFPI Extends NMLS Transition for CFL Licensees to March 15, 2022
On November 16, the California DFPI released Version 2.0 of its Annual Report of Finance Lenders, Brokers and PACE Administrators Licensed under the California Financing Law (CFL). The Annual Report examined unaudited data gathered from finance lenders, brokers, and Property Assessed Clean Energy (PACE) administrators licensed under the CFL, as well as new data from the “buy now, pay later” or BNPL industry.
Continue Reading DFPI Reports Increase in Consumer Loans Under $2,500, Decrease in Consumer Loans Between $2,500 and $10,000
California Governor Newsom announced the appointment of Clothilde “Cloey” Hewlett as the next Commissioner of the Department of Financial Protection and Innovation (DFPI). She will start after Thanksgiving, when she will take over for the Acting Commissioner, Christopher Shultz. Hewlett is the current Executive Director and Chief Legal Officer for the Cal Alumni Association, and previously served as Undersecretary of the State and Consumer Services Agency and Interim Director of the Department of General Services. She also has extensive enforcement experience, previously serving as an Assistant District Attorney for the San Francisco District Attorney’s Office, Criminal Investigator with the City and County of San Francisco, and Director of Moral Character Determinations for the State Bar of California. Ms. Hewlett’s appointment is subject to confirmation by the California Senate within one year.
Continue Reading New Commissioner Appointed to lead CA DFPI: Cloey Hewlett
Licensees under the California Financing Law not currently on NMLS must transition onto NMLS by December 31, 2021.
Continue Reading NMLS Transition for California Financing Law Licensees: December 31, 2021 Deadline