California, October 21, 2025

News Summary

On October 6, California Governor Gavin Newsom signed SB 825, amending the California Consumer Financial Protection Law. This law enhances consumer protections by allowing the California Department of Financial Protection and Innovation to enforce against deceptive practices while providing specific exemptions for licensed financial service providers. SB 825 addresses gaps in federal oversight that could leave consumers vulnerable and aims to strengthen consumer choices in the financial landscape. Implementation is set for January 2026, prompting financial institutions to prepare for increased compliance costs and regulatory challenges.

California

On October 6, California Governor Gavin Newsom signed SB 825 into law, a significant amendment to the California Consumer Financial Protection Law (CCFPL). This legislation is designed to enhance consumer protections and expand the enforcement authority of the California Department of Financial Protection and Innovation (DFPI) amid concerns regarding federal oversight.

One of the central tenets of SB 825 is its clarification that licensed financial service providers—such as escrow agents, finance lenders, and broker-dealers—are exempt from the CCFPL under specific licenses. However, the DFPI retains the authority to enforce prohibitions against “deceptive or abusive acts or practices.” This allows the DFPI to take action against unfair practices that fall outside the licensing scope of these financial service providers.

The need for SB 825 arose as a reaction to the reduction in federal oversight by the Consumer Financial Protection Bureau (CFPB) during the Trump administration. The law aims to close regulatory gaps that could leave consumers vulnerable to unfair or deceptive financial practices while strengthening consumer protections in California.

The amendment balances regulated activities with consumer safety, as seen with the CCFPL, which prohibits “covered persons” or “service providers” from engaging in unfair, deceptive, or abusive acts in offering consumer financial products or services. SB 825 narrows specific exemptions that previously protected state-chartered banks, credit unions, nonbank lenders, and payment service providers from DFPI actions. Now, the DFPI has broadened investigative powers, including the ability to issue subpoenas, initiate administrative proceedings, and pursue various forms of relief against entities allegedly violating the CCFPL.

The new law does not, however, extend DFPI‘s jurisdiction over national banks or other federally chartered institutions. This limitation has led to concerns about heightened compliance risks for financial institutions, as there may be overlapping regulatory oversight in the sector. The standards for determining what constitutes “unfair” and “deceptive” acts are still considered unsettled, which poses additional litigation and compliance challenges for these financial entities.

As financial institutions brace for the implications of this new law, increased compliance costs are anticipated due to the complexities introduced by the DFPI‘s new enforcement powers under SB 825. Supporters argue that stronger state leadership is necessary to safeguard consumers in light of diminished federal oversight. However, critics voice apprehensions about potential regulatory overreach and its impact on financial service providers.

With the implementation of SB 825 expected in January 2026, stakeholders in the finance sector, including consumers and providers alike, will need to navigate the evolving landscape of financial regulation in California.

Key Features of SB 825

• Signed into law by Governor Gavin Newsom on October 6.
• Amends the California Consumer Financial Protection Law (CCFPL).
• Clarifies exemptions for licensed financial service providers.
• Allows the DFPI to enforce against unfair, deceptive, or abusive practices.
• Aims to close regulatory gaps stemming from reduced federal oversight.
• Expanded investigative powers for the DFPI.
• Does not expand DFPI jurisdiction over national banks.
• Implementation date set for January 2026.

FAQ

Chart: Key Features of SB 825

Deeper Dive: News & Info About This Topic

• Daily Journal: SB 825 Expanding State Consumer Financial Protection
• JD Supra: California Amends Its Financial Regulations
• Manatt: California Responds to Federal Deregulation
• Consumer Financial Services Law Monitor: California Introduces Consumer Protection Legislation
• Wikipedia: California
• Google Search: California Consumer Financial Protection Law

Author: STAFF HERE LOS ANGELES WRITER

The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond, specializing in "news you can use" with coverage of 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 from years of dedicated reporting and strong community input, including local press releases and business updates, while delivering top reporting on high-value events like the Academy Awards, LA Auto Show, and Los Angeles Marathon, extending coverage to key organizations such as the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology like Warner Bros. and SpaceX, and as part of the broader HERE network including HEREAnaheim.com , HERECostaMesa.com , HEREHuntingtonBeach.com , and HERESantaAna.com , providing comprehensive, credible insights into Southern California's dynamic landscape. HERE Anaheim HERE Beverly Hills HERE Coronado HERE Costa Mesa HERE Hollywood HERE Huntington Beach HERE Long Beach HERE Los Angeles HERE Mission Viejo HERE San Diego HERE Santa Ana