Willie Almack


The California Consumer Financial Protection Law (CCFPL) was passed in 2020. This piece of legislation rebranded the state’s financial services regulator as the “Department of Financial Protection and Innovation” (DFPI) and authorized the creation of an “Office of Financial Technology Innovation” (OFTI) within the DFPI. The CCFPL grants the DFPI expanded supervision over “fintech” providers—firms that leverage software-based technologies to deliver financial services to consumers via nontraditional conduits. Recognizing that fintech presents both potential benefits and risks for consumers, the California legislature took measures to ensure that the new regulatory scheme does not stifle innovation. Using the DFPI as a lens, this Note examines and analyzes the balancing act regulators engage in to promote innovation in fintech, all while avoiding regulatory capture and still providing consumer protection. The Note goes on to describe and evaluate the DFPI’s “innovation hub” approach to achieve its stated goal of fostering responsible innovation. Finally, the Note offers a working definition of “responsible innovation” and provides a series of recommendations to help guide the DFPI’s—and other financial regulators’—efforts in this area