California, October 21, 2025
News Summary
On October 6, California Governor Gavin Newsom signed SB 825 into law, enhancing consumer protections by expanding the enforcement powers of the Department of Financial Protection and Innovation. The law narrows exemptions for financial service providers under the California Consumer Financial Protection Law, allowing the DFPI to take action against deceptive practices. Set to take effect in January 2026, this legislation aims to address reduced federal oversight and increase compliance risks for financial institutions in California.
California
On October 6, California Governor Gavin Newsom signed SB 825 into law, amending the California Consumer Financial Protection Law (CCFPL). This legislation is designed to strengthen consumer protections by expanding the enforcement authority of the California Department of Financial Protection and Innovation (DFPI) over various financial service providers, including escrow agents, finance lenders, and broker-dealers.
SB 825 clarifies that licensed financial service providers are exempt from the CCFPL under specific licenses, yet the DFPI retains the authority to enforce prohibitions on “deceptive or abusive acts or practices.” The bill enables DFPI to pursue enforcement actions against unfair, deceptive, or abusive acts outside the scope of existing licenses, ensuring consumer protection oversight remains intact despite the entities’ licensing status.
The new law was introduced in response to a notable reduction in federal oversight by the Consumer Financial Protection Bureau (CFPB) during the previous Trump administration. SB 825 aims to close existing regulatory gaps in California and bolster the state’s consumer protections in the face of this diminished federal regulation. The bill passed the Assembly with a vote of 59-19 and had received earlier approval in the Senate in June 2025. If enacted, SB 825 is scheduled to take effect in January 2026.
The CCFPL prohibits “covered persons” or “service providers” from engaging in unfair, deceptive, or abusive acts while offering consumer financial products or services. Prior exemptions under the CCFPL had shielded state-chartered banks, credit unions, nonbank lenders, and payment service providers from DFPI actions, but these exemptions are narrowed by the new law. As a result, the DFPI will have broad investigative powers that enable it to issue subpoenas, initiate administrative proceedings, and seek various forms of relief against entities allegedly violating the CCFPL.
It is important to note that the legislation does not expand DFPI’s jurisdiction over national banks or other federally chartered institutions. Financial institutions in California can expect heightened compliance risks due to potential overlapping regulatory oversight resulting from the new enforcement powers under SB 825.
Furthermore, the standards for identifying “unfair” and “deceptive” acts remain unsettled, which may raise litigation and compliance concerns among financial institutions. Increased compliance costs are expected as these institutions work to navigate the complexities introduced by SB 825.
Supporters of the new law argue that it serves as a vital safeguard against the negative impacts of reduced federal oversight on consumer protections. Conversely, critics have expressed concerns regarding potential regulatory overreach that may arise from the expanded enforcement authority of the DFPI.
FAQ
What is SB 825?
SB 825 is a California law signed by Governor Gavin Newsom on October 6 that amends the California Consumer Financial Protection Law (CCFPL) to strengthen consumer protections.
What new powers does SB 825 grant the DFPI?
SB 825 allows the DFPI to enforce prohibitions on deceptive or abusive acts, issue subpoenas, institute administrative proceedings, and seek various forms of relief against entities violating the CCFPL.
When will SB 825 take effect?
SB 825 is set to take effect in January 2026.
Does SB 825 apply to national banks?
No, the bill does not expand DFPI’s jurisdiction over national banks or other federally chartered institutions.
What concerns have been raised about SB 825?
Critics have expressed concerns about potential regulatory overreach resulting from the expanded enforcement authority of the DFPI.
Chart: Key Features of SB 825
| Feature | Description |
|---|---|
| New Law Date | October 6 |
| Effective Date | January 2026 |
| Authority to Enforce | DFPI has expanded authority over CCFPL enforcement |
| Licensing Exemptions | Narrowed for certain entities |
| Jurisdiction Over Institutions | Does not apply to national or federally chartered banks |
| Compliance Risks | Increased due to overlapping regulatory oversight |
Deeper Dive: News & Info About This Topic
- Daily Journal: SB 825 Expanding State Consumer Financial Protection
- JD Supra: California Amends Its Financial Protections
- Manatt: California Responds to Federal Deregulation
- Sacramento Bee: Opinion on Consumer Financial Protection
- Consumer Financial Services Law Monitor: California Introduces Consumer Protection Legislation
- Wikipedia: Consumer Financial Protection
- Google Search: California Consumer Financial Protection
- Google Scholar: California Consumer Financial Protection Law
- Encyclopedia Britannica: Financial Regulation
- Google News: California Consumer Financial Protection
Author: STAFF HERE CORONADO
The Coronado Staff Writer represents the experienced team at HERECoronado.com, your go-to source for actionable local news and information in Coronado, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Coronado Island Film Festival, productions at Lamb’s Players Theatre, community workshops at John D. Spreckels Center, and iconic celebrations at Hotel del Coronado. Our coverage extends to key organizations like the Coronado Chamber of Commerce and Visit Coronado, plus leading businesses in hospitality, dining, and tourism that drive the local economy. As part of the broader HERE network, including HERESanDiego.com, HEREHuntingtonBeach.com, HERELongBeach.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
