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67 Covered persons are subject to reporting and examination by the DFPI under the CCPFL regime. e DFPI may require a covered person to generate records or respond to written questionnaires, and mandated reporting may include monitoring, regulatory, and assessment activity. Just as the CCFPL requires a level of transparency and public accountability from the covered persons, it likewise exposes its own agency to the same level of transparency, requiring the DFPI to virtually publicize annually, via its website, an accounting of the actions taken pursuant to the law, including rulemaking, enforcement, oversight, complaints, education, and research. In addition, the commissioner of the DFPI is required to report annually to the appropriate legislative committees regarding all activities undertaken pursuant to the CCFPL. ENFORCEMENT In addition to acting as the gatekeeper of UDAAP, pursuant to CCPFL, the DFPI assumes authority to enforce consumer financial laws related to recordkeeping and reporting violations by covered persons, service providers, and aiders and abettors. is authority is not retroactive and only applies to acts, practices, and violations after the operative date of the law. e DFPI has the right to pursue revocation of the license or registration of a covered person or service provider for the violation of any law, rule, order, or condition instituted by the DFPI. e CCPFL bestows upon the DFPI investigatory and subpoena power and authorizes the DFPI to bring a civil action or administrative proceeding by violation of the CCFPL or written condition propounded by the DFPI itself. Moreover, it is within the DFPI's dominion under the CCPFL, to issue cease and refrain orders for violations. e orders may be deemed final if the respondent does not request a hearing within 30 days. e DFPI can also file suit to enforce its order. REMEDIES Along with its far-reaching enforcement jurisdiction, the DFPI has the authority to seek broad spectrum of relief for violations of the UDAAP, which includes: » rescission or reformation of contracts » refunds » restitution » disgorgement or compensation for unjust enrichment » payment for damages » public notification of the violation, including the costs of notice » injunctive relief » civil money penalties Notably absent from this list of potential remedies are exemplary and punitive damages. LIMITATIONS While the CCFPL seemingly grants the DFPI full dominion, there are few tangible restraints. For one, the DFPI is bound by the Statute of Limitations (SOL) and is accordingly barred from bringing a civil suit under the CCPFL more than four years after identifying the violation. is is a palpable limitation because the DBO has historically maintained that it is not bound by any SOL. ough it extends the SOL one year beyond that of Dodd-Frank, the CCPFL nonetheless sets a distinct threshold and in this regard imposes a governor on the DOB. THE UPSIDE Given its legislative mission, a hybrid of consumer protection and financial innovation, it is reasonable to expect that the DFPI will spotlight fintechs and bank partnerships and work to foster a more level playing field and encourage all financial institutions to play nicely together, and alongside the consumers, in the proverbial sandbox—and not just on the beaches of the Golden State, but across the nation. THE DOWNSIDE Remember in elementary school, how egregiously unfair it was when that one irksome deviant broke the teacher's rules and then everyone had to suffer the penalty and stay in for recess? Well, that is the equivalent here—a few bad financial players got the lunch lady's attention and now there is no kickball at recess. WHAT HAPPENS NEXT? Governor Newsom has signed the CCFPL into law, which will then become effective on January 1, 2021. As a consequence of the CCPFL's sanctioned re-org, the DFPI will have access to increased funding to expand its supervisory and enforcement role for California state-chartered banks, existing licensees, as well as previously unlicensed entities. ough formally exempt from the CCFPL, banks and current BDO licensees may now be beholden to the DFPI's broad, intentionally more aggressive, UDAAP and enforcement authority. Get ready for a wild ride as we approach the CCFPL's inauguration. Providers of financial products and services, fintechs and banks should pay close attention to what is happening in the Golden State because the effects of the CCFP will undoubtedly reach beyond California state lines and potentially be a catalyst for change in other states. Rosemarie C. Hebner is an Attorney at Houser LLP. Hebner graduated from Villanova University and obtained her Juris Doctorate from the Elisabeth Haub School of Law at Pace University. She represents corporations, financial institutions, and other institutional clients. She previously worked as in-house counsel for a prominent Fortune 500 manufacturing company, served as insurance defense counsel in the private sector, and has led CLE programs. Hebner is licensed to practice in New York and New Jersey. Eric Houser is Managing Partner of Houser LLP. He has a national litigation practice specializing in consumer and commercial finance, default servicing, title, bankruptcy, and technology litigation. Houser has successfully tried cases from Hawaii to Connecticut. He graduated from the University of California, San Diego in 1984 and the University of San Diego School of Law in 1987. Houser is licensed to practice law in California and before the United States Supreme Court.

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