Pub. 2 2020-2021 Issue 3

15 the DFPI to be housed within the existing Department of Business Oversight (DBO) and modeled after the federal Consumer Financial Protection Bureau (CFPB) – an agency whose purview dealers were expressly exempted from under the Dodd-Frank Wall Street Reform Act. The new DFPI was provided for in a budget trailer bill, which many legislators took issue with because that method resulted in less debate within individual legislative committees about the nuts and bolts of such a complicated oversight effort. The agen- cy will have the authority to bring enforcement actions against companies, issue fines and crackdown on “unfair, deceptive and abusive acts or practices.” Many involved in negotiations felt that the effort was being unduly rushed. In mid-summer, it seemed as if the proposal would be held, as the state had massive issues taking priority — the coronavirus pandemic, out-of-control wildfires throughout Northern California, and a mounting homeless crisis exacerbated by both of the above — not to mention protests advocating for police reform. During the few debates held on the DFPI proposal, some legisla- tors expressed hesitance at creating a brand-new agency that will regulate businesses with a heavy hand during a time when many businesses are struggling to survive as it is. Many argu- ments were advanced that the creation of this agency should not move forward since it is not related to COVID. In contrast, agency proponents claimed this agency is needed now more than ever due to “record numbers of consumer complaints” com- ing into the state agencies against various businesses. Those pushing this proposal argued that the goal wasn’t to regulate businesses that are already licensed by a state agency; instead, they said they were trying to protect consumers from predatory lending by capturing entities like largely unregulated payday lenders. However, as drafted, there is some apparent am- biguity that will likely be tested in the courts for years to come. For our part, we negotiated with DBO for months about get- ting an industry-specific carve-out from the new agency’s oversight, as dealers are already heavily regulated by numer- ous state and federal agencies, including the Department of Motor Vehicles, Department of Consumer Affairs, Bureau of Automotive Repair, Department of Industrial Relations, Occupational Safety and Health Standards Board, Labor Commissioner’s Office, Division of Workers’ Compensation, Department of Tax and Fee Administration, CalRecycle, Office of Environmental Health Hazard Assessment, Department of Toxic Substances Control, Department of Water Resources, Air Resources Board, New Motor Vehicle Board, Attorney General’s Office, city and county officials throughout the state, and the Federal Trade Commission. Despite the goal of only regulating businesses not already subject to oversight by other state agencies, the proponents refused to grant a dealer-specific carve-out. However, franchised new-car dealers find CONTINUED ON PAGE 16