On May 12, 2026, California Governor Gavin Newsom announced the appointment of Rohit Chopra—former Director of the Consumer Financial Protection Bureau (CFPB) and former Commissioner of the Federal Trade Commission (FTC)—to lead the newly formed Business and Consumer Services Agency (BCSA).

The BCSA, which will open its doors on July 1, 2026, is a new cabinet-level agency that will consolidate oversight of a broad range of consumer- and business-facing regulatory departments under a single roof. Among the agencies housed within BCSA, the Department of Financial Protection and Innovation (DFPI) is of particular significance, especially given Chopra’s background at both the CFPB and FTC. The DFPI has expansive authorities under California law to regulate, supervise, investigate and bring enforcement actions against a wide array of financial services providers. The appointment of an aggressive former federal regulator to this role will be significant for financial services providers serving California residents, as it signals a shift toward more aggressive, coordinated state-level oversight and enforcement.

The Business and Consumer Services Agency

In May 2025, Governor Newsom proposed splitting the state’s Business Consumer Services and Housing Agency into two new cabinet-level agencies: the California Housing and Homelessness Agency, focused on housing and homelessness issues, and the BCSA, focused on consumer affairs, licensing and regulatory enforcement. The BCSA will function as an umbrella agency overseeing several existing departments, including the Department of Financial Protection and Innovation, Department of Alcoholic Beverage Control (and its appeals board), Department of Cannabis Control, Cannabis Control Appeals Panel, California Horse Racing Board, Department of Consumer Affairs and Department of Real Estate.

Governor Newsom’s office has stated that the BCSA will spearhead a coordinated effort to build on existing consumer protection initiatives by “strengthening oversight, improving coordination across departments, and modernizing California’s consumer protection framework amid growing threats from weakened federal enforcement.”

While the BCSA has a broad mandate, Chopra’s authority over DFPI has drawn particular attention. As California’s financial regulator, DFPI is charged with regulating a wide range of financial institutions and professionals—including banks, credit unions, mortgage lenders, fintech providers, digital asset providers, money transmitters and debt collectors—offering consumer financial products or services in California.

DFPI also exercises expansive enforcement authority under the California Consumer Financial Protection Law (CCFPL), which makes it unlawful for “covered persons” to engage in unlawful, unfair, deceptive or abusive acts or practices (UUDAAP) with respect to the offering of consumer financial products or services to California consumers. In late 2025, this prohibition—and by extension, DFPI’s enforcement authority—was expanded in direct response to the reduction in federal consumer financial enforcement activity. As amended, the CCFPL’s definition of “covered persons” broadly extends to entities offering or providing consumer financial products or services to California residents—including their affiliates and service providers—subject to certain limited (but important) exclusions for national banks and certain out-of-state chartered institutions.

DFPI also is charged with licensing and enforcement activity under several other state statutes, including the Money Transmission Act, the California Residential Mortgage Lending Act and the Digital Financial Assets Law, among others, all of which may serve as levers for Governor Newsom’s broader consumer protection initiatives. These statutes confer broad authority on DFPI to license and regulate financial service providers, conduct supervisory examinations and, as applicable, take enforcement actions.

Preparing for the BCSA under Secretary Chopra

 Understanding Rohit Chopra’s likely approach at the BCSA begins with examining his record as Director of the CFPB from 2021 to 2025. During that period, the CFPB filed or resolved 103 enforcement actions, obtaining orders that returned over $6 billion to consumers and imposed more than $3.2 billion in civil money penalties.¹ During his tenure, the CFPB deliberately shifted its focus toward the largest financial institutions, aggressively scrutinized “repeat offenders,” and made elimination of “junk fees” a centerpiece of the CFPB’s enforcement policy (a policy priority shared by Governor Newsom). The CFPB also pursued novel efforts to extend its jurisdiction or interpret the laws it is charged with enforcing, including through guidance announcing legal interpretations or identifying conduct the CFPB would consider unlawful. For example, it sought to apply the Consumer Financial Protection Act’s prohibition against unfair acts or practices to certain forms of alleged discrimination not expressly covered by federal laws, including the Equal Credit Opportunity Act and the Fair Housing Act.

Chopra also has been a vocal advocate for state enforcement of consumer financial protection laws. Shortly after becoming CFPB Director, in remarks to the National Association of Attorneys General (NAAG) in 2021, Chopra identified what he saw as the historical dangers of federal preemption undermining state consumer protection laws and encouraged expanding the authority of state attorneys general.² In January 2025, days before the change in presidential administrations, the CFPB also released a report encouraging states to take a more active role in addressing the consumer protection challenges of the modern economy.³ (WilmerHale published a client alert analyzing the report.)

The appointment of Chopra comes at a time when the Trump Administration has significantly curtailed CFPB enforcement and regulatory activity. Governor Newsom has explicitly positioned California as stepping into the breach, and Chopra’s own public statements frame the BCSA as a counterweight to federal deregulation. Companies that may have assumed reduced regulatory pressure following changes at the federal level should not assume that the same will hold true in California. The DFPI—and California’s Attorney General—may increasingly pursue enforcement matters that the CFPB declines to bring.

Below are some initial considerations for firms as they prepare for a new era in California consumer protection regulation and enforcement: 

1. Expect Heightened Enforcement Activity and Larger Penalties. Chopra’s CFPB was defined by its willingness to pursue large-dollar enforcement actions. Companies should anticipate that the DFPI—under Chopra’s strategic direction—will pursue more aggressive enforcement, seek larger penalties and demand more comprehensive consumer restitution. The CCFPL’s broad UUDAAP authority will serve as a powerful enforcement tool that can be applied across the full spectrum of financial services.
2. Prior Enforcement History Will Be an Aggravating Factor. Companies with prior enforcement actions—whether by the DFPI, other state regulators or federal agencies, and whether or not related to the alleged wrongdoing at issue—should expect enhanced scrutiny. Chopra’s “repeat offender” framework at the CFPB resulted in dramatically escalated scrutiny and penalties for institutions with prior enforcement histories, and we expect the same will be true under a DFPI guided by Chopra.
3. Fee Practices Will Be Under Intense Scrutiny. Chopra focused extensively on “junk fees” at the CFPB. Governor Newsom has likewise emphasized “crack[ing] down on junk fees and hidden charges,” so companies should expect DFPI (and BCSA more broadly) to be focused on fee structures, disclosures and pricing practices. This includes service fees, late fees, account maintenance fees and any charges that could be characterized as hidden, excessive or inadequately disclosed.
4. Prepare for an Expansive Reading of UUDAAP Authority. The CCFPL’s prohibition of unlawful, unfair, deceptive, or abusive acts or practices provides the DFPI with a flexible and expansive enforcement tool. Chopra demonstrated at the CFPB a willingness to push the boundaries of that agency’s UDAAP authority—including into areas such as fair lending and data privacy—and companies should expect similarly creative applications of the CCFPL’s UUDAAP standard. The addition of a standalone “unlawful” prong—also present in California’s Unfair Competition Law—means that the DFPI may pursue enforcement actions for violation of any federal or state consumer financial law, similar to authority exercised by the New York Attorney General under Executive Law 63(12).
5. Expect Substantive Policy Positions in Public Announcements. Chopra’s tenure at the CFPB reflects a willingness to seek to move policy—and market participants’ behavior—through public announcements, in some cases reflecting new or changed interpretations of legal requirements. At the CFPB, Chopra used such announcements, often in the form of “guidance” or “circulars,” to stake out the agency’s position on a variety of issues. In some cases, these announcements posed difficult questions for regulated entities about whether and how to modify a practice in response to a comparatively brief statement of policy lacking the specific factual background or detailed reasoning of a formal enforcement action or rulemaking.
6. Digital Assets and Fintech Companies Face Immediate Compliance Deadlines. The Digital Financial Assets Law’s (DFAL) licensing requirements take effect on July 1, 2026—the same date the BCSA officially launches. Companies engaged in digital financial asset business activity should ensure they have obtained a DFAL license or submitted a completed application, if required. Chopra’s arrival at the BCSA coinciding with DFAL’s compliance deadline suggests that digital assets may be an early enforcement priority. The DFPI has already demonstrated its willingness to take action in this space, including a May 2026 enforcement action that shut down a crypto kiosk operator.
7. Nonbank Financial Services Providers Should Expect Increased Supervisory Activity. At the CFPB, Chopra emphasized the use of supervisory examinations—not just enforcement actions—to identify and remediate violations. The DFPI’s supervisory authority extends to licensed and registered entities across a wide range of product lines. Companies should assess whether their compliance management systems are robust and examination-ready, including policies and procedures, training programs, complaint management processes, and internal audit functions.
8. Upcoming Election May Affect Chopra’s Tenure. California will elect a new governor in November, who will assume office in January. Chopra’s tenure in his position—and the degree of support he receives from the Governor’s office—may depend on the outcome of the election.

Chopra’s appointment suggests that California will continue to expand its role as a primary enforcer of consumer financial protection laws, particularly where federal activity is perceived to be receding. WilmerHale’s financial institutions team has considerable experience in these areas and would be glad to be of assistance.