From the CFPB to California: What Chopra’s Appointment to Lead the New Business and Consumer Services Agency Means for Regulated Industries

The appointment places a former CFPB Director and FTC Commissioner at the head of a new California agency overseeing financial services, consumer affairs, real estate, cannabis, alcohol, licensing, and other regulated markets. Companies across those industries should prepare now for a regulator whose record focuses on real-world consumer and small business impact, pattern recognition, and cross-agency coordination.

By Michael Kilgarriff, Melissa Richards, and Catherine Warren

A New Agency, a Consequential Leader

Governor Gavin Newsom has appointed Rohit Chopra to lead California’s new Business and Consumer Services Agency (“BCSA”), placing one of the country’s most prominent consumer and small business protection regulators inside a cabinet-level agency with authority across multiple regulated markets.

BCSA, created through a reorganization of the former Business, Consumer Services and Housing Agency, is scheduled to launch on July 1, 2026. It will bring together the Department of Financial Protection and Innovation (“DFPI”), Department of Consumer Affairs (“DCA”), Department of Real Estate (“DRE”), Department of Alcoholic Beverage Control (“ABC”), Department of Cannabis Control (“DCC”), California Horse Racing Board, and related appeals bodies. Governor Newsom’s announcement described the agency as bringing together “a broad range of licensing, enforcement and other functions” affecting consumers and businesses across California’s economy.

The appointment is significant because of two things: Chopra’s record and the agency’s structure. Chopra brings experience across two federal agencies. He served as a Commissioner of the Federal Trade Commission from 2018 to 2021, where he focused on stronger penalties for repeat violators, more aggressive antitrust enforcement, and scrutiny of Big Tech practices—establishing themes around repeat conduct, structural accountability, and the gap between paper compliance and real-world impact that carried directly into his next role. He then served as Director of the Consumer Financial Protection Bureau from 2021 to 2025, where the CFPB recovered nearly $10 billion in refunds and penalties from companies that broke the law. Across both roles, Chopra built a record focused not only on consumer disclosures and technical compliance, but on how consumer- and small business-facing practices actually operate—including fees, complaints, recurring problems, market structure, remediation, management accountability, and credit access. Notably, Chopra’s CFPB expanded fair lending and transparency oversight into small business credit through ECOA and Dodd-Frank Act authorities, including the Bureau’s Section 1071 Small Business Data Collection Rule, which required financial institutions to collect and report data on credit applications for small businesses, including those that are minority-owned or women-owned.

BCSA will give that approach a broader California platform because the new agency will sit above departments that touch financial services, real estate, consumer affairs, alcohol, cannabis, horse racing, and DCA-regulated professions and occupations.

The appointment requires California state Senate confirmation. While confirmation appears likely, it remains a procedural step that has not yet occurred.

For companies doing business in California, the development is broader than consumer finance. California is pairing a new cabinet-level agency with a regulator whose federal work—across both the FTC and the CFPB—focused on whether consumer- and small business-facing practices function fairly in the real world. And California is doing so at a moment when federal consumer protection enforcement has substantially receded. The CFPB under its current leadership has rescinded dozens of guidance documents and unwound or dropped multiple enforcement actions. Governor Newsom explicitly framed the appointment as a response to the federal pullback, stating that California needs “strong and fearless leaders to keep protecting Californians.” For regulated companies, the practical implication is clear: less federal scrutiny paired with more state scrutiny changes the compliance allocation calculus.

What Companies Should Review Before July 1

Before examining Chopra’s record and California’s existing regulatory environment in detail, it is worth starting with the practical question companies should be asking now: if a California regulator asked about this practice tomorrow, could the company explain how it works, why it is lawful, how consumers and small businesses experience it, and how problems are corrected?

Companies with meaningful California operations should use the period before BCSA’s launch to review where their customer-facing practices, complaint data, and regulatory obligations intersect—particularly across the multiple regulatory lanes BCSA will oversee. Areas worth reviewing include:

• Fee disclosures, recurring charges, add-on products, and cancellation flows. Chopra’s CFPB repeatedly targeted fee structures that created friction for consumers or obscured the true cost of products.
• Advertising, pricing, savings claims, and comparison-shopping disclosures. Claims that are technically defensible but practically misleading are squarely within Chopra’s enforcement philosophy.
• Consumer and small business complaint intake, escalation, remediation, and root-cause analysis. BCSA’s multi-department structure means complaint trends may be visible across regulatory lines. Companies should be able to show not only that a remediation process exists, but that it has actually resolved identified issues.
• Servicing, collections, refunds, disputes, and hardship practices. How these processes function in practice—not merely how they are documented in policy—will be the relevant question.
• Data use, automated decisioning, personalization, and AI-enabled tools. Chopra flagged algorithmic lending, credit decisioning, and consumer-facing AI repeatedly at the CFPB. Companies deploying AI in consumer-facing contexts should review whether those tools have been tested for disparate impact and explainability.
• Small business lending and commercial financing disclosures. Chopra’s CFPB expanded fair lending and credit-access oversight into small business credit, and California has enacted its own Commercial Financing Disclosure Law (SB 1235) requiring Truth-in-Lending-style disclosures for commercial financing offers of $500,000 or less. Companies making commercial loans or extending commercial financing in California should review whether their disclosure practices satisfy both federal and California requirements.
• Prior regulatory orders and enforcement history. Chopra’s repeat-offender framework means BCSA may look at a company’s full enforcement history—not just California matters. Companies that have been subject to prior consent orders, settlements, or supervisory actions anywhere should assess whether those obligations have been fully satisfied and whether the underlying practices have been durably remediated.
• Licensing obligations, vendor oversight, and California-specific regulatory requirements. A licensing issue may expose broader questions about customer communications, advertising, or business oversight.
• California Consumer Financial Protection Law (“CCFPL”) abusiveness exposure. The CCFPL’s abusiveness standard mirrors the federal CFPA standard Chopra helped interpret at the CFPB. Companies should evaluate whether California-facing practices could be characterized as obscuring information, exploiting unequal bargaining power, or taking unreasonable advantage of consumer reliance.
• Internal escalation processes for issues that may implicate more than one California regulator. BCSA’s structure creates the possibility that a single practice—a fee disclosure, a data practice, a complaint trend—could draw attention from multiple departments simultaneously.

The companies best positioned for this environment will be those that can explain not only what their policies say, but how their practices operate in real time.

Chopra’s Record: Patterns, Not Just Violations—Across Consumers and Small Businesses

Chopra’s combined tenure at the FTC and the CFPB shows why his appointment is not a routine leadership change. His regulatory approach treated patterns—not individual violations—as the primary unit of analysis, and his focus extended beyond individual consumer protection into small business credit access and fair lending.

At the CFPB, Chopra consistently looked beyond whether a company made a required disclosure or violated a discrete technical rule. The Bureau under his leadership examined whether consumers could understand and act on the terms they were offered, whether fee structures or account designs created friction, whether complaints revealed deeper operational problems, and whether recurring issues reflected weaknesses in management oversight.

The Bureau’s 2023 policy statement on abusive acts or practices codified that approach. In essence, the CFPB interpreted the abusiveness standard broadly—not just as addressing affirmative misrepresentation, but as reaching any practice that obscures relevant information or exploits power asymmetries, gaps in consumer understanding, or circumstances in which consumers cannot protect their own interests.

Chopra’s CFPB also expanded its focus beyond individual consumer protection into small business credit, using ECOA and Dodd-Frank Act authorities to push fair lending and transparency requirements into markets that had historically operated without consumer-protection-style oversight. That policy instinct—extending disclosure, data collection, and fair lending scrutiny to small business credit—is one Chopra is likely to carry into his California role, particularly given that DFPI already administers one of the country’s most significant state commercial financing disclosure regimes.

The same pattern-recognition philosophy drove the Bureau’s repeat-offender work. In 2024, the CFPB finalized a registry for nonbank companies subject to certain agency and court orders involving consumer financial protection laws. The registry’s significance lies not in its mechanics but in what it reveals about Chopra’s regulatory worldview: prior orders, repeat conduct, management accountability, and recurring problems across products or business lines are all relevant to understanding a company’s risk profile. Chopra’s prepared remarks on the final rule emphasized the Bureau’s focus on whether companies, senior management, and boards were treating orders as binding obligations rather than suggestions.

That approach maps naturally onto BCSA’s structure. The new agency will sit above departments that receive complaints, issue licenses, supervise market participants, and discipline regulated businesses. In that setting, a complaint trend, licensing issue, pricing practice, or data-use concern may be viewed not only as a discrete regulatory matter, but as evidence of a broader oversight or remediation failure. BCSA is an umbrella agency; the underlying departments retain their independent statutory authority. The significance of Chopra’s role lies in coordination, priority-setting, and cross-department visibility—not direct exercise of each department’s enforcement powers.

Chopra Arrives Pre-Loaded

Chopra’s transition to California was not abrupt. After leaving the CFPB in January 2025, he oversaw publication of “Strengthening State-Level Consumer Protections”—a detailed framework urging states to adopt CFPA-style abusiveness standards, expand attorney general investigatory powers, lower evidentiary hurdles for private plaintiffs, and strengthen data rights. That document reads, in retrospect, as an operating blueprint for the kind of state-level enforcement Chopra will now oversee.

In December 2025, the Democratic Attorneys General Association hired Chopra to lead its Consumer Protection and Affordability Working Group, coordinating enforcement strategy with state attorneys general across financial services, technology, and healthcare. That work gave Chopra 7 months of relationship-building and policy development with state enforcement leaders before arriving at BCSA.

The practical implication for companies is that BCSA is unlikely to have a long ramp-up period. Chopra has spent the period since leaving federal service building the policy infrastructure and institutional relationships that will inform his California agenda. Companies should plan accordingly.

BCSA Enters an Already Active—and Aligned—California Regulatory Environment

BCSA will launch into a California regulatory environment that is already aggressive across privacy, competition, financial services, small business credit, licensing, and consumer-facing business practices. It will not replace the California Attorney General, CalPrivacy, DFPI, DCA, DRE, ABC, DCC, or other state authorities. It will operate beside them and, for several of those agencies, above them.

Importantly, California’s legislative and regulatory trajectory over the past decade is already aligned with the ambitious approach to consumer and small business credit protection that Chopra has championed at the federal level.

California’s Commercial Financing Disclosure Law

A case in point is California’s Commercial Financing Disclosure Law. Enacted through SB 1235 in 2018 and later strengthened by SB 33, the law requires commercial lenders to provide Truth-in-Lending-style early disclosures at the time an offer of credit is made for unsecured and non-real estate secured commercial financing of $500,000 or less—bringing the kind of standardized cost transparency long required in consumer lending to the commercial financing market.

The Commercial Financing Disclosure Law reflects the same regulatory instinct that animated Chopra’s federal work: the belief that market participants—whether consumers or small businesses—need standardized, comprehensible cost disclosures to make informed decisions. DFPI, which enforces the Commercial Financing Disclosure Law, will sit directly within BCSA. A regulator who spent years building federal small business credit transparency requirements will now oversee an agency whose lead financial services department already administers one of the most significant state commercial financing disclosure regimes in the country.

Recent Enforcement Activity

Recent enforcement activity further illustrates the breadth and thematic alignment of California’s regulatory environment:

Data practices and consumer privacy. The California Attorney General and CalPrivacy recently announced a settlement with General Motors involving the alleged sale of driver location and driving data, with CalPrivacy describing the matter as the largest CCPA penalty in California history and California’s first data minimization case.

Consumer-facing disclosures and business oversight. The Attorney General announced a settlement with Aspen Dental involving alleged corporate practice of dentistry and false advertising, including injunctive terms, penalties, and restitution.

Licensing and unlicensed activity. DFPI brought a January 2026 action against Nexo Capital for allegedly making loans to California residents without a valid license.

The throughline across these matters—and the Commercial Financing Disclosure Law—is clear: California regulators are already examining how companies collect and use data, present prices and terms, structure consumer- and small business-facing services, manage licenses, respond to complaints, and remediate practices once concerns are identified. BCSA adds a cabinet-level coordination structure over several agencies that already touch those issues. Chopra’s appointment adds a leader whose career—across both the FTC and the CFPB—has been built around precisely these themes.

For companies, the risk is not simply more enforcement actions. It is more connected scrutiny. A fee disclosure may raise questions about advertising and consumer protection. A licensing issue may expose broader questions about customer communications or business oversight. A complaint trend may suggest a servicing, refund, or remediation problem. A commercial financing disclosure gap may draw attention from both DFPI and broader BCSA-level review. A data practice may interest privacy regulators, consumer protection officials, and industry-specific agencies simultaneously. And a leader with Chopra’s pattern-recognition orientation may be inclined to draw those connections.

Buchalter’s Perspective

For companies operating in California, BCSA’s launch is not only a regulatory development. It is a reason to reassess how consumer- and small business-facing practices are documented, escalated, and defended across agencies—before the new structure is in place.

Buchalter’s State Attorneys General, White Collar and Investigations, and California regulatory teams represent companies in government investigations, regulatory inquiries, enforcement actions, and related litigation. That experience is especially important in the environment BCSA creates: when a complaint trend raises questions about remediation effectiveness, when a licensing matter exposes broader concerns about consumer-facing practices, when a commercial financing disclosure issue draws scrutiny from both DFPI and the broader agency, or when a single set of facts draws attention from multiple departments simultaneously, companies need counsel that understands how to respond to cross-agency, cross-theory scrutiny—not just a single regulator’s inquiry.

Chopra’s appointment does not answer every question about how BCSA will operate after July 1. It does show California pairing a broad new agency structure with a regulator whose record—across the FTC and the CFPB—has focused on consumer protection, small business credit access, affordability, market conduct, repeat-conduct oversight, and the belief that how a practice functions matters as much as what the policy says.

This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. No statement in this communication constitutes legal advice nor should any communication herein be construed, relied upon, or interpreted as legal advice. This communication is for general information purposes only regarding recent legal developments of interest, and is not a substitute for legal counsel on any subject matter. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal advice on the particular facts and circumstances affecting that reader. For more information, visit www.buchalter.com.