What Consumer-Facing Companies Need to Know about CA's New Regulatory Agency

California Governor Gavin Newsom that former CFPB Director and former FTC Commissioner Rohit Chopra will serve as the first Secretary of California’s new Business and Consumer Services Agency (BCSA), framing the appointment as part of the state’s effort to bolster consumer protection as federal enforcement recedes.

Newsom tasked Chopra with delivering more assertive, coordinated and outcome-focused consumer protection, particularly in pricing, advertising, and digital and financial services. With a mandate to target junk fees, strengthen privacy, and advance affordability, the BCSA is poised to make California a de facto national regulator for consumer-facing practices—especially for companies with a California nexus that operate nationwide.

Effective July 1, 2026, California’s existing Business, Consumer Services, and Housing Agency will split into the BCSA and the California Housing and Homelessness Agency (CHHA). The BCSA will oversee consumer affairs, licensing, and regulatory enforcement, including the Department of Financial Protection and Innovation, the Department of Consumer Affairs, and the Department of Real Estate, among other offices. The CHHA will oversee housing production and preservation, homelessness policy and solutions, and civil rights enforcement. It will include the new Housing Development and Finance Committee, along with the Department of Housing and Community Development, the California Housing Finance Agency, the Civil Rights Department, and other offices.

What Consumer-Facing Companies Can Expect

Chopra’s earlier CFPB tenure prioritized eliminating junk fees and price gouging. California already has the Honest Pricing Law (SB 478), which requires “all-in” advertised pricing and bans drip pricing. It is likely that Chopra will focus on stronger enforcement of hidden fee prohibitions, expansion of enforcement into adjacent sectors (health, subscriptions, fintech, marketplaces), and potential use of “abusiveness” theories where pricing exploits information asymmetries.

While rulemaking, enforcement, and other authorities will continue to reside with the departments within the BSCA, Chopra is expected to have a significant influence on policy matters and agency priorities. Chopra was known during his tenure as CFPB Director from 2021 to 2025 for taking an expansive view of the Bureau’s authority and advancing a highly consumer-protective view of the law. His appointment signals that the state is likely to take an assertive posture with respect to financial services regulation and other issues in the coming months and years. 

Preview for Consumer Financial Services Sector

Chopra’s time at the CFPB may provide a preview of his likely priorities at the BCSA, at least with respect to the consumer financial services issues regulated by DFPI. While many of the actions taken by the CFPB under Chopra’s leadership have since been rolled back, during his tenure the Bureau:

• an interpretive rule providing that buy now, pay later (BNPL) financing products are “credit cards” under the Truth in Lending Act (TILA), making BNPL providers “card issuers” and therefore “creditors” under Regulation Z.
• Determined that most forms of earned wage access are consumer loans under TILA and sought to them as such.
• Advanced aggressive theories under laws prohibiting unfair, deceptive, or abusive acts and practices, including announcing that it would prosecute discrimination as an “unfair” practice, even in situations where fair lending laws may not apply.
• Took actions to combat junk fees.

Also while at the CFPB, Chopra took a broad view of what constituted “consumer” financial services and sought to extend the Bureau’s mandate to financial services involving small-to-medium sized businesses (SMBs). With certain California laws under the BCSA’s departments’ authorities already extending to SMBs—such as the California Financing Law—these departments can be expected to increase enforcement activities with respect to companies offering financial products to SMBs, including revenue-based financing.

Companies offering financial services to California consumers—especially those offering products and services the CFPB targeted during Chopra’s tenure—should expect a more complex and demanding regulatory environment in California. His appointment reflects a broader trend of states seeking to fill the gap left by the second Trump Administration’s pullback in federal financial regulation. In fact, shortly before President Trump’s January 2025 inauguration, the CFPB issued a encouraging states to strengthen their consumer protection laws, which may provide a roadmap for the BCSA and DFPI. Earlier, in 2022, the CFPB issued an clarifying that states have authority to enforce federal consumer financial protection laws and encouraging them to do so. Chopra is likely to use his role at the BCSA to advance these priorities.

Preparing for the BCSA Era

As California centralizes enforcement authority and intensifies its focus on pricing integrity, data practices and consumer protection, consumer-facing companies should proactively position themselves for a more coordinated—and more aggressive—regulatory environment. Early alignment across legal, compliance and business teams will be critical to mitigating risk and avoiding multi-agency scrutiny.

To prepare, companies should prioritize the following:

1. Prepare for coordinated oversight across agencies: Companies should assess where obligations, products and customer touchpoints intersect across California regulators, align internal owners, and build a unified response plan so issues do not escalate across multiple agencies at once.
2. Stress-test fees, pricing and customer disclosures: Clients should start reviewing fee structures, renewal terms, marketing claims and complaint trends, with a focus on areas likely to draw scrutiny around affordability, hidden charges, scams and allegedly unfair practices.
3. Integrate privacy, data and consumer protection readiness: Companies should be positioned to update data governance, vendor oversight, consumer-facing disclosures and incident-response protocols so privacy compliance and consumer protection risk are managed together rather than in separate silos.

If you have questions, please contact any of the authors or the Manatt professional with whom you work.

Contributing Authors:

Consumer Advertising, Regulatory and Class Action

, Partner and Leader

, Partner

, Partner

, Partner

Consumer Financial Services

, Partner

, Partner

, Partner

, Partner

, Associate

, Associate

AI, Privacy and Data Security

, National Advisor

, Partner

Government

, Partner and Leader