California Consumer Finance Law - Hot Topics and Recent Developments

Consumer Finance Monitor

California frequently is in the vanguard of consumer financial issues and legislation, foreshadowing trends that may spread to other states. Today’s episode, during which we explore important hot topics and recent developments in California consumer finance law, is hosted by Ballard Spahr partner Melanie Vartabedian, and features Partners Michael Guerrero and Joel Tasca, and Of Counsel John Kimble.

We first discuss what the future likely holds for proposed rules issued under the California Consumer Financial Protection Law (CCFPL) by the California Department of Financial Protection and Innovation (DFPI). The proposed rules include complex registration and reporting requirements for certain consumer products, and are under revision after rejection by the California Office of Administrative Law for lack of clarity. We then explore the DFPI's most recent annual report on activity under the CCFPL, which recaps the DFPI's rulemaking, enforcement efforts, complaints received, and efforts in connection with education outreach and the Office of Financial Innovation. Highlights include a rule that applies consumer-type “unlawful, unfair, deceptive, or abusive acts and practices” (referred to in the report as “UUDAAP”) prohibitions to financial products and services provided to small businesses; ramped-up enforcement efforts; and high-dollar settlements as well as litigation in progress. Next, we turn to a comparison of California’s Rosenthal Fair Debt Collection Practices with the federal Fair Debt Collection Practices Act, and discuss their similarities, differences, and litigation trends under both laws. We then focus on the California Consumer Credit Reporting Agencies Act, which poses challenges for companies that report consumer data to consumer reporting agencies over and above the requirements of federal law. We conclude with a look at unique issues arising in California with respect to the FTC “holder rule”.