Insights

On May 12, California Governor Gavin Newsom announced the appointment of former Consumer Financial Protection Bureau Director Rohit Chopra to serve as secretary of California's new Business and Consumer Services Agency. If you're doing business in California, have any California contracts in your portfolio, or have consumers with a California address, your world just got a lot more complicated.

Newsom announced last year that the California Business, Consumer Services, and Housing Agency would be split into two agencies, effective this July 1. The new BCSA will bring together several boards, bureaus, and departments under one agency and includes the Department of Financial Protection and Innovation, the Department of Consumer Affairs, the Department of Real Estate, the Department of Alcoholic Beverage Control, the Department of Cannabis Control, the California Horse Racing Board, and related appeals bodies. The other new agency will be the California Housing and Homelessness Agency.

Chopra said, "While federal agencies are making life more expensive and enriching special interests, California will be firing on all cylinders to make sure markets aren't rigged against families and small businesses." He also said that "[b]y bringing together dozens of boards, bureaus, and departments under one roof, California's new agency will work to protect the public in health care, technology, financial services, and more. I'm grateful to Governor Newsom for the opportunity to serve as the new agency's Secretary."

Newsom's office stated that the new BCSA will build on California's efforts to crack down on "junk fees" and hidden charges, strengthen online privacy and consumer data protections, and expand enforcement against scams and predatory practices by strengthening oversight, improving coordination across departments, and modernizing the state's consumer protection framework amid growing threats from weakened federal enforcement.

The press release announcing the appointment touted how "California is stepping up as federal protections are rolled back" and how "Governor Newsom has positioned California as a national leader in consumer protection and affordability."

The California Senate must approve Chopra's appointment. If Chopra is approved, might he resort to some (or many) of the same enforcement tactics previously deployed at the CFPB during his tenure, such as efforts to eliminate what the BCSA determines (in its sole discretion) are "junk fees" and assert broad unfair and deceptive acts or practices claims against businesses, practices, and products that the BCSA doesn't like? Things just got a whole lot more interesting in the Golden State.

Eric L. Johnson is a partner in the Oklahoma office of Hudson Cook, LLP. He can be reached at 405.602.3812 or by email at ejohnson@hudco.com.