California Signals a New Era of State-Led Consumer Protection

Since the Trump administration took office in 2025, a marked shift in federal consumer financial protection policy has left many industry stakeholders reassessing the regulatory landscape. With the Consumer Financial Protection Bureau (CFPB) in particular scaling back enforcement activity and narrowing its supervisory focus, industry stakeholders have turned their attention to the states to see whether they are willing and able to step into the resulting vacuum.

California is now emerging as the clearest example of this shift in action. This past May, Governor Gavin Newsom announced the creation of a new consumer protection agency, the Business and Consumer Services Agency (BCSA). At the same time, Governor Newsom appointed former CFPB Director Rohit Chopra, widely recognized for his aggressive enforcement positions, as the agency’s inaugural leader.

According to a press release from the Governor’s office, the BCSA will spearhead a range of initiatives focused on strengthening consumer protections, including efforts to crack down on so-called “junk fees,” expanding enforcement against predatory practices, and increasing corporate transparency and accountability. The agency will also coordinate licensing, supervision, and enforcement functions across numerous state departments.

For the fintech and banking industries, the implications are clear. The creating of the agency and selection of Chopra as its initial head signals that, even as federal oversight recedes, regulatory scrutiny is not going away entirely. Instead, it is becoming more fragmented and, in some jurisdictions, more aggressive. As it often is, California is out in front of other states, but others will no doubt follow its lead.

You can find Governor Newsom’s press release announcing the new agency and Mr. Chopra as its head here.