A new proposal in California, Senate Bill 825 (SB 825), is intended to strengthen the enforcement authority of the state's Department of Financial Protection and Innovation (DFPI) by clarifying that it can take action against unfair, deceptive, or abusive acts or practices (UDAAPs)—even when the company involved is licensed under one of the state's existing financial services laws.
Under current law, many companies licensed by DFPI—including finance lenders, escrow agents, proraters, and mortgage servicers—are exempt from certain provisions of the California Consumer Financial Protection Law (CCFPL) when they are acting within the scope of their specific license. This has led to uncertainty about whether the DFPI can use the broader CCFPL to bring UDAAP enforcement actions against these licensees.
CA SB 825 would resolve that ambiguity. If passed, the bill would confirm that being licensed under a legacy California financial statute does not prevent DFPI from taking action under the CCFPL for misconduct—particularly for acts deemed unfair, deceptive, or abusive.
With CA SB 825, the DFPI would have clear authority to also pursue those practices under the CCFPL, which may allow for broader remedies and stronger consumer protections.
The bill is scheduled for a hearing before the California Senate Judiciary Committee on April 22, 2025.
While the proposal is California-specific, it reflects a larger national trend of state regulators seeking to assert broader authority over financial services providers—especially as federal enforcement priorities shift.
