Existing law provides for the licensure and regulation of various financial institutions by the Commissioner of Financial Protection and Innovation. Some of those laws require the commissioner to charge and collect specified fees and assessments.

This bill would require the commissioner to, on or before March 1, 2027, and annually thereafter, report to the Joint Legislative Budget Committee, the Senate Banking and Financial Institutions Committee, and the Assembly Banking and Finance Committee the projected and actual revenues and expenditures, including the difference between revenues and expenditures, for the immediately preceding fiscal year for various laws enforced by the commissioner, as specified.

This bill would require, for each of those laws that authorizes the Department of Financial Protection and Innovation to issue and collect assessments and charges on a pro rata basis to recover the actual costs of administering that law, the department to include in any report pursuant to the bill the method of determining those assessments and charges.

Existing law provides for the licensure and regulation of various financial institutions by the Commissioner of Financial Protection and Innovation. Some of those laws require the commissioner to charge and collect specified fees and assessments.

This bill would require the commissioner to, on or before March 1, 2027, and annually thereafter, report to the Joint Legislative Budget Committee, the Senate Banking and Financial Institutions Committee, and the Assembly Banking and Finance Committee the projected and actual revenues and expenditures, including the difference between revenues and expenditures, for the immediately preceding fiscal year for various laws enforced by the commissioner, as specified.

This bill would require, for each of those laws that authorizes the Department of Financial Protection and Innovation to issue and collect assessments and charges on a pro rata basis to recover the actual costs of administering that law, the department to include in any report pursuant to the bill the method of determining those assessments and charges.

The Escrow Law Existing law provides for the licensure and regulation of escrow agents various financial institutions by the Commissioner of Financial Protection and Innovation. The law requires Innovation. Some of those laws require the commissioner to charge and collect specified fees and assessments. The law makes any person who violates any of its provisions liable for a specified civil penalty. The law requires the commissioner to pay all moneys they receive under the law into the State Treasury to the credit of the State Corporations Fund.

This bill would require the commissioner to annually submit a report to the Legislature that provides a detailed budget and accounting of the commissioners oversight, implementation, and enforcement of the Escrow Law. to, on or before March 1, 2027, and annually thereafter, report to the Joint Legislative Budget Committee, the Senate Banking and Financial Institutions Committee, and the Assembly Banking and Finance Committee the projected and actual revenues and expenditures, including the difference between revenues and expenditures, for the immediately preceding fiscal year for various laws enforced by the commissioner, as specified.

The Escrow Law provides for the licensure and regulation of escrow agents by the Commissioner of Financial Protection and Innovation. The law requires the commissioner to charge and collect specified fees and assessments. The law makes any person who violates any of its provisions liable for a specified civil penalty. The law requires the commissioner to pay all moneys they receive under the law into the State Treasury to the credit of the State Corporations Fund.

This bill would require the commissioner to annually submit a report to the Legislature that provides a detailed budget and accounting of the commissioners oversight, implementation, and enforcement of the Escrow Law.

 CONSENT  

Bill No: AB 2425

Author: Chen (R)

Amended: 4/16/26 in Assembly

Vote: 21

SENATE BANKING & F.I. COMMITTEE: 7-0, 6/17/26

AYES: Grayson, Niello, Cervantes, Hurtado, Reyes, Richardson, Strickland

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 77-0, 5/27/26 - See last page for vote

SUBJECT: Department of Financial Protection and Innovation: budget reports

SOURCE: Author

DIGEST:

This bill requires the Department of Financial Protection and Innovation to report annually to the Legislature information related to revenues and expenses associated with specified licensing and registration programs administered by the department.

ANALYSIS:

Existing Law:

1. Requires the Department of Financial Protection and Innovation (DFPI) to report annually to the Joint Legislative Budget Committee, the Senate Banking and Financial Institutions Committee, and the Assembly Banking and Finance Committee the projected and actual revenues and expenditures, including months in reserve for the immediately preceding fiscal year for specified subprograms administered by DFPI. (Budget Act of 2025, SB 101, Chapter 4, Statutes of 2025)
2. Requires DFPI to provide written updates to the Joint Legislative Budget Committee, the Senate Banking and Financial Institutions Committee, and the Assembly Banking and Finance Committee, no later than six months after the effective date of any fee or assessment adjustment, as specified, for the purpose of informing legislative oversight of fund stability and assist in evaluating the need for budgetary or statutory adjustments. (Budget Act of 2025, SB 101, Chapter 4, Statutes of 2025)
3. Requires DFPI to issue and collect assessments and charges on a pro rata basis to recover the actual costs of administering licensing law, to the extent authorized by any existing licensing law. (Budget Act of 2025, SB 101, Chapter 4, Statutes of 2025)

This bill:

1. Codifies the requirement described in 1) of the Existing Law section, with minor technical changes.
2. Requires DFPI to report nonexam revenues in subcategories containing totals for annual assessment revenue, application and licensing fees, renewal fees, fingerprinting fees, penalties and settlement revenue, income from the Surplus Money Investment Fund, investigation fees, delinquent fees, and cost recovery.
3. Requires DFPI to report, for each specified licensing law that authorizes the collection of assessments on a pro rata basis, the method of determining those assessments.

Background

DFPI is the state financial services regulator, and the department conducts most of its activities through licensing or registration laws that are tailored to specified categories of financial services. These laws establish requirements that a person engaged in a specified activity must be licensed or registered with the department before engaging in such activity, establish the minimum requirements and procedures for obtaining a license, and regulate conduct related to the activity, such as mandatory, permissible, and prohibited behaviors, when providing the specified financial product or service. Except for institutions or activities that are regulated solely by the federal government, DFPI oversees a broad portfolio of financial service providers, including the following categories that are covered by this bill: broker-dealers and investment advisors, franchise investments, mortgage bankers, finance lenders and brokers, Property Assessed Clean Energy program administrators, escrow agents, deferred deposit transaction providers (aka payday lenders), state banks, money transmitters, debt collectors, digital financial asset service providers, and registered covered persons who provide consumer financial products or services.

Licensing or registration programs administered by DFPI are intended to be fiscally self-sustaining; that is, the licensees or registrants bear the costs of the regulatory program with no additional support needed from the general fund. By 2024, and possibly earlier, the commissioner of DFPI recognized that several programs were structurally deficient: revenues were consistently insufficient to cover costs. In 2024, DFPI contracted with an independent accounting firm to conduct a fiscal and cost study of its programs. The resulting report identified structural deficits across most of the program analyzed.^[1] A subsequent report by the Legislative Analyst’s Office, which relied in part on the report from the independent accounting firm, identified cost and revenue factors that caused the deficits, including an increase in annual salary adjustments, startup costs for new programs enacted by the Legislature and Governor, static fee levels due to statutory limits that had not been amended in decades, and the loss of three large banks due to mergers or failure.^[2]

As part of the 2025-26 budget, the Legislature and Governor enacted a budget trailer bill that increased the fees charged by several of the DFPI programs facing fiscal stress. As part of the Budget Act of 2025, control language was enacted that requires DFPI to report annually to the Legislature specified information related to the fiscal health of certain programs and, to extent permissible by law, to charge pro rata assessments to licensees or registrants to ensure that annual program expenses are fully recovered.

This bill seeks to codify in statute the reporting requirements included in the Budget Act of 2025. Additionally, the bill requires more granular reporting of program revenues. Different from the Budget Act of 2025, this bill requires DFPI to report the method of determining the assessments and charges related to any pro rata apportionment of cost recoveries.

Comments

Purpose. According to the author:

AB 2425 increases transparency by requiring the Department of Financial Protection and Innovation (DFPI) to publish data on its revenues and expenditures, while also clarifying the methodology used to determine certain assessments and charges. This bill brings greater transparency to the DFPI by ensuring that licensees can clearly understand how funds are allocated, and how fees are justified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 8/3/26)

None received

OPPOSITION: (Verified 8/3/26)

None received

ASSEMBLY FLOOR: 77-0, 5/27/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NO VOTE RECORDED: Lee, Ortega, Celeste Rodriguez

Prepared by: Michael Burdick / B. & F.I. /

8/5/26 15:04:45

**** END ****

1. https://dfpi.ca.gov/wp-content/uploads/2024/11/Fiscal-and-CAP-Analysis-Report.pdf ↑

2. https://lao.ca.gov/Publications/Report/5025 ↑

SENATE COMMITTEE ON

BANKING AND FINANCIAL INSTITUTIONS

Senator Timothy Grayson, Chair

2025 - 2026 Regular

Bill No: AB 2425 Hearing Date: June 17, 2026

Subject: Department of Financial Protection and Innovation: budget reports

SUMMARY

This bill requires the Department of Financial Protection and Innovation to report annually to the Legislature information related to revenues and expenses associated with specified licensing and registration programs administered by the department.

EXISTING LAW

1. Requires the Department of Financial Protection and Innovation (DFPI) to report annually to the Joint Legislative Budget Committee, the Senate Banking and Financial Institutions Committee, and the Assembly Banking and Finance Committee the projected and actual revenues and expenditures, including months in reserve for the immediately preceding fiscal year for specified subprograms administered by DFPI. (Budget Act of 2025, SB 101, Chapter 4, Statutes of 2025)
2. Requires DFPI to provide written updates to the Joint Legislative Budget Committee, the Senate Banking and Financial Institutions Committee, and the Assembly Banking and Finance Committee, no later than six months after the effective date of any fee or assessment adjustment, as specified, for the purpose of informing legislative oversight of fund stability and assist in evaluating the need for budgetary or statutory adjustments. (Budget Act of 2025, SB 101, Chapter 4, Statutes of 2025)
3. Requires DFPI to issue and collect assessments and charges on a pro rata basis to recover the actual costs of administering licensing law, to the extent authorized by any existing licensing law. (Budget Act of 2025, SB 101, Chapter 4, Statutes of 2025)

THIS BILL

1. Codifies the requirement described in #1 of the Existing Law section, with minor technical changes.
2. Requires DFPI to report nonexam revenues in subcategories containing totals for annual assessment revenue, application and licensing fees, renewal fees, fingerprinting fees, penalties and settlement revenue, income from the Surplus Money Investment Fund (SMIF), investigation fees, delinquent fees, and cost recovery.
3. Requires DFPI to report, for each specified licensing law that authorizes the collection of assessments on a pro rata basis, the method of determining those assessments.

COMMENTS

1. Purpose

According to the author:

AB 2425 increases transparency by requiring the Department of Financial Protection and Innovation (DFPI) to publish data on its revenues and expenditures, while also clarifying the methodology used to determine certain assessments and charges. This bill brings greater transparency to the DFPI by ensuring that licensees can clearly understand how funds are allocated, and how fees are justified.

1. Background

DFPI is the state financial services regulator, and the department conducts most of its activities through licensing or registration laws that are tailored to specified categories of financial services. These laws establish requirements that a person engaged in a specified activity must be licensed or registered with the department before engaging in such activity, establish the minimum requirements and procedures for obtaining a license, and regulate conduct related to the activity, such as mandatory, permissible, and prohibited behaviors, when providing the specified financial product or service. Except for institutions or activities that are regulated solely by the federal government, DFPI oversees a broad portfolio of financial service providers, including the following categories that are covered by this bill: broker-dealers and investment advisors, franchise investments, mortgage bankers, finance lenders and brokers, PACE program administrators, escrow agents, deferred deposit transaction providers (aka payday lenders), state banks, money transmitters, debt collectors, digital financial asset service providers, and registered covered persons who provide consumer financial products or services.

Licensing or registration programs administered by DFPI are intended to be fiscally self-sustaining; that is, the licensees or registrants bear the costs of the regulatory program with no additional support needed from the general fund. By 2024, and possibly earlier, the commissioner of DFPI recognized that several programs were structurally deficient: revenues were consistently insufficient to cover costs. In 2024, DFPI contracted with an independent accounting firm to conduct a fiscal and cost study of its programs. The resulting report identified structural deficits across most of the program analyzed.^[1] A subsequent report by the Legislative Analyst’s Office, which relied in part on the report from the independent accounting firm, identified cost and revenue factors that caused the deficits, including an increase in annual salary adjustments, startup costs for new programs enacted by the Legislature and Governor, static fee levels due to statutory limits that had not been amended in decades, and the loss of three large banks due to mergers or failure.^[2]

As part of the 2025-26 budget, the Legislature and Governor enacted a budget trailer bill that increased the fees charged by several of the DFPI programs facing fiscal stress. As part of the Budget Act of 2025, control language was enacted that requires DFPI to report annually to the Legislature specified information related to the fiscal health of certain programs and, to extent permissible by law, to charge pro rata assessments to licensees or registrants to ensure that annual program expenses are fully recovered.

This bill seeks to codify in statute the reporting requirements included in the Budget Act of 2025. Additionally, the bill requires more granular reporting of program revenues. Different from the Budget Act of 2025, this bill requires DFPI to report the method of determining the assessments and charges related to any pro rata apportionment of cost recoveries.

LIST OF REGISTERED SUPPORT/OPPOSITION

Support

None received

Opposition

None received

-- END --

1. https://dfpi.ca.gov/wp-content/uploads/2024/11/Fiscal-and-CAP-Analysis-Report.pdf ↑

2. https://lao.ca.gov/Publications/Report/5025 ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 2425

Author:(Chen)

As Amended Ver:April 16, 2026

Majority vote

SUMMARY

1. This bill requires the Department of Financial Protection and Innovation (DFPI) to provide information about the aggregate totals for the subcategories of income that comprise non-exam revenue for specified licensee.
2. Requires DFPI to include the method of determining the pro rata basis on which to collect assessments and charges for each applicable division.

Major Provisions

Specifically, this bill:

1. Pertains to the following licensees: Broker/Dealers and Investment Advisors (BDIA), Franchise Investments, Mortgage Bankers, California Finance Lenders, Escrow, Deferred Deposit transactions, Banks, Money Transmitters, New Covered Persons, Debt Collectors
2. Requires the (DFPI) to provide aggregate total subcategory information for non-exam revenue, including annual assessment revenue, application and licensing fees, renewal fees, fingerprint fees, penalties and settlement revenue, income from the Surplus Money Investment Fund (SMIF), investigation fees, delinquent fees, and cost recovery.
3. Requires DFPI to include the method of determining the pro rata basis on which to collect assessments and charges for each applicable division.

COMMENTS

1. Background

The DFPI is California's primary regulator for financial services, products, and professionals. The Department was formed by expanding the then existing Department of Business Oversight in 2020. The DFPI expanded its programmatic responsibilities due to the following legislative mandates:

1. California Consumer Financial Protection Law, 2021 (CCFPL), Chapter 157, Statutes of 2020 (AB 1864); effective January 1, 2021, gives the DFPI new regulatory responsibilities to protect consumers from unfair, deceptive, or abusive practices committed by previously unlicensed regulated entities. These may include industries that currently exist unregulated in California or new products or services that may enter the market in the future.
2. Debt Collectors Licensing Act, 2022, Chapter 163, Statutes of 2020 (SB 908); effective January 1, 2022, gives the DFPI new regulatory responsibilities to provide licensure, regulation, and oversight of California debt collection practices.
3. Digital Financial Assets Law, 2023 Chapters 792 and 871, Statutes of 2023 (AB 39 and SB 401); effective July 1, 2025, gives the DFPI new regulatory responsibilities to provide licensure, regulation, and oversight of digital asset activities in California.

The convergence of these additional programmatic mandates and historical stagnancy in fee and assessment rates significantly strained the Department's fiscal solvency. In an effort to ensure long-term fiscal sustainability, the DFPI engaged an external consultant for a comprehensive fiscal and cost allocation plan analysis; subsequently, the Crow study was produced. According to the Crowe study, DFPI's FY 2024-25 total budget is covered by the following sources:

1. Financial Protection Fund covers approximately $159.4 million (89.5%) of the DFPI's total budget and supports the Investment, Lender-Fiduciary, Licensing and Supervision of Banks and Trust Companies, Money Transmitters, California Consumer Financial Protection, Debt Collectors, and Digital Financial Assets Programs.
2. Credit Union Fund covers approximately $14.5 million (8.1%) of the DFPI's total budget and supports the Credit Unions Program.
3. Financial Empowerment Fund covers approximately $2.3 million (1.3%) of the DFPI's total budget and supports the CalMoneySmart Program.
4. Local Agency Deposit Security Fund covers approximately $0.6 million (0.4%) of the DFPI's total budget and supports the Administration of Local Agency Security Program.
5. Reimbursements covers approximately $1.3 million (0.7%) of the DFPI's total budget and provides limited support for the Licensing and Supervision of Banks and Trust Companies and Credit Unions Programs.^[1]

Although DFPI receives funding from four special funds, in a typical year the overwhelming majority of the department's funding (85 to 90%) comes from one special fund, the Financial Protection Fund. Most of the Financial Protection Fund's revenues are generated by licensing and registration fees, program assessments (charges levied on regulated entities to cover oversight costs), and examination fees (to cover costs associated with specific audits or inspections).

1. Results

The findings regarding established programs from the Crowe study are:

"The DFPI requires an additional $80.4 million through FY 2027-28 to support its programmatic needs for the Investment, Lender-Fiduciary, Banking, and Money Transmitters Programs.

1. The Investment Program's needs total $25.0 million. This includes $18.6 million for the Broker Dealers Investment Advisers subprogram and $6.4 million for Franchise Investment subprogram.
2. The Lender-Fiduciary Program's needs total $33.3 million. This includes $12.7 million for Mortgage
3. Bankers, $6.3 million for California Finance Lenders, $11.2 million for Escrow, and $3.1 million for
4. Deferred Deposit Transaction subprograms.
5. The Banking Program's needs total $21.5 million.
6. The Money Transmitters Program's needs total $0.5 million.
7. The DFPI does not currently require additional resources to support the Administration of Local

Agency Security, Credit Unions, and CalMoneySmart Programs."^[2]

1. Recommendations from the Crowe Study

The Broker-Dealers Investment Advisers (BDIA) subprogram required an additional $18.6 million through FY 2027-28, a 35% fee increase.^[3]  As renewal fees account for approximately 80% of BDIA's projected revenue from FY 2025-26 through FY 2027-28, the Department could consider implementing a 44% increase to BDIA's renewal fees for broker dealer agents and investment adviser representatives as an alternative to implementing a uniform 35%.

The Franchise Investment subprogram required $6.4 million in additional revenue through FY 2027-28, which could be met by increasing its fees by 176%. 

The Lender-Fiduciary Program required an additional $33.3 million through FY 2027-28. Of this amount, the Mortgage Bankers subprogram required $12.7 million, the California Finance Lenders subprogram required $6.3 million, the Escrow subprogram required $11.2 million, and the Deferred Deposit Transaction subprogram required $3.1 million.^[4]

The study recommended "In FY 2025-26, the Mortgage Bankers subprogram requires a 158% cumulative adjustment to its fees, the California Finance Lenders subprogram requires a 24% cumulative adjustment to its fees, the Escrow subprogram requires an 84% cumulative adjustment to its fees, and the Deferred Deposit Transaction subprogram requires a 65% cumulative adjustment to its fees. These cumulative adjustments include revenue from SMIF and enforcement actions.^[5]"

The California Finance Lenders subprogram required $6.3 million in additional revenue through FY 2027-28. The California Finance Lenders subprogram's needs could be met by increasing its fees by 26%.^[6] As an alternative, the study recommended that the pro rata assessment accounts for approximately 80% of California Finance Lenders' projected revenue from FY 2025-26 through FY 2027-28. The DFPI could consider implementing a 28% increase to the pro rata assessment as an alternative to implementing a uniform 26% increase to the assessment and all fees (except exam fees).^[7]

The Escrow subprogram required $11.2 million in additional revenue through FY 2027-28. The Escrow subprogram's needs could be met by increasing its fees by 88%. This proposed fee adjustment would generate an additional $10.4 million in assessments, $139 thousand in application fees, and $35 thousand in fingerprint fees. In addition, the 26% increase to the Escrow exam fee to $120 per hour beginning in FY 2024-25 would generate an additional $629 thousand through FY 2027-28.

As an alternative, the study provided that the Escrow subprogram's annual license fee and special assessment account for roughly 80% of its projected revenue from FY 2025-26 to FY 2027-28. The DFPI could consider implementing a 158% increase to its annual license fee as an alternative to implementing a uniform 88% increase to the special assessment and all fees (except exam fees).

The Deferred Deposit Transaction subprogram required $3.1 million in additional revenue through FY 2027-28. The Deferred Deposit Transaction subprogram's needs could be met by increasing its fees by 68%. The proposed fee adjustment would generate an additional $3.0 million in assessments, and minimal amounts in application fees and fingerprint fees. In addition, the 50% increase to the Deferred Deposit Transaction exam fee to $120 per hour beginning in FY 2024-25 would generate an additional $63 thousand through FY 2027-28. The study also recommended that the Department may want to consider delaying assessment changes until pending legislation (AB 3148) is finalized.^[8]

1. Calls for Transparency 

One group of licensees that did not face increases but raised serious concerns over high assessments was Debt Collectors. In April 2026, Receivables Management Association International (RMAI) and other impact licensees filed a class action lawsuit against the Department alleging, among other causes, violation of due process and unconstitutional taxes in response to the increased assessments.^[9] The plaintiffs are representatives impacted by the Debt Collection Licensing Program. In pertinent part, the lawsuit alleges that the total to be recovered exceeds the reasonable cost of regulation. Specifically, it alleges that "DFPI has developed program costs for 7,000 licensees but currently licenses 1,243 businesses. Rather than recalibrate its fees once it learned of the actual costs of the licensing tasks for the smaller group of licensees, it set unreasonable and disproportionate fees based on inaccurate information." Debt settlement, deferred deposit, and escrow licensees have made similar calls to understand their pro rata share after receiving their most recent annual assessment. The Department has refutes the Debt Collectors' claim, citing a revised budget change proposal based on half the number of licensees.

The Department provides assessments for some licensees on a pro rata basis to equitably distribute program costs. Pro rata distribution can be based on size of the licensees, number of locations, volume of business, or other factors as determined by the relevant statute. Confusion exists as to how pro rata calculations are made see AB 2028. 

1. What this bill does

AB 2425 requires the Department to provide the aggregate totals for the subcategories that make the non-exam revenue portion of the totals reported for licensees as required under AB 102. It also requires the Department to include the method by which it determines pro rata distribution for licensees when applicable. While the likelihood that the licensees will be satisfied with their respective assessment increases by providing transparency of the subtotals that comprise the non-exam revenue of programs, it may reduce confusion and implied claims of mismanagement.

According to the Author

"AB 2425 increases transparency by requiring the Department of Financial Protection and Innovation (DFPI) to publish data on its revenues and expenditures, while also clarifying the methodology used to determine certain assessments and charges. This bill brings greater transparency to the DFPI by ensuring that licensees can clearly understand how funds are allocated, and how fees are justified."

Arguments in Support

None received. Last certified 5/11/26.

Arguments in Opposition

None received. Last certified 5/11/26.

FISCAL COMMENTS

Minor and absorbable costs to DFPI to produce the annual report. However, since the primary purpose of this bill is to create a report, this bill qualifies for this committee's suspense file pursuant to this committee's rules and custom and practice.

VOTES

ASM BANKING AND FINANCE: 9-0-0

YES: Valencia, Chen, Dixon, Fong, Krell, Michelle Rodriguez, Blanca Rubio, Schiavo, Harabedian

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

UPDATED

VERSION: April 16, 2026

CONSULTANT: Desiree Nguyen Orth / B. & F. / (916) 319-3081 FN: 0002793

1. Crowe (2024, November 18) "Fiscal and Cost Allocation Plan Analysis" pp.8 ↑

2. Crowe pp. 21 ↑

3. Id. at 27. The study notes that the proposed fee increase excludes revenue from SMIF and enforcement actions. ↑

4. Id. ↑

5. Id. at 28 ↑

6.  Id. at 31 This fee increase excludes revenue from SMIF and enforcement actions. ↑

7.  Id. at. 32 ↑

8. Id. at 33 ↑

9.  Receivables Management Association International, et al. vs. State Of California Department et al., Superior Court of San Francisco Case Number: CPF26519661. ↑

Date of Hearing: May 6, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2425

Author:(Chen) – As Amended Ver:April 16, 2026

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Department of Financial Protection and Innovation (DFPI) to provide an annual report to the Legislature about the revenues and expenditures related to various regulatory programs administered by DFPI.

Beginning February 1, 2027, and every March 1 thereafter, the report must categorize and report projected and actual revenues as exam or non-exam revenues, with non-exam revenues reported in sub-categories containing totals for annual assessment revenue, certain fees, penalties and settlement revenue, income from the Surplus Money Investment Fund, and cost recovery. The report must also include the method of determining the pro rata assessments and charges collected by DFPI to recover the actual costs of administering certain laws.

FISCAL EFFECT:

Minor and absorbable costs to DFPI to produce the annual report. However, since the primary purpose of this bill is to create a report, this bill qualifies for this committee’s suspense file pursuant to this committee’s rules and custom and practice.

COMMENTS:

1. Purpose. According to the author:

AB 2425 increases transparency by requiring [DFPI] to publish data on its revenues and expenditures, while also clarifying the methodology used to determine certain assessments and charges. This bill brings greater transparency to the DFPI by ensuring that licensees can clearly understand how funds are allocated, and how fees are justified.

1. Background. Crowe Study. The recent expansion of DFPI authority and programs combined with historical stagnancy in fee and assessment rates have significantly strained DFPI’s fiscal solvency. In an effort to ensure long-term fiscal sustainability, DFPI engaged an external consultant to conduct a comprehensive fiscal and cost allocation plan analysis, now known as the Crowe study. The study found that significant revenue increases were needed across DFPI’s regulatory programs, which could be generated by various fee increases. As a result, AB 137 (Committee on Budget), Chapter 20, Statues of 2025, increased various fees for broker-dealers, franchises, banks and credit unions, money transmitters, escrow agents, mortgage lenders and servicers.

Pro Rata Assessments. DFPI imposes assessments for some licensees on a pro rata basis to equitably distribute program costs. Pro rata distribution may be based on the licensee’s size, number of locations, volume of business, or other factors as determined by the relevant program statute. AB 102 (Committee on Budget), Chapter 5, Statutes of 2025, required DFPI to annually report the projected and actual revenues and expenditure for certain DFPI programs, with revenues categorized as exam or non-exam revenues, similar to this bill. This bill additionally requires the reporting of non-exam revenues in subcategories of certain revenue types and DFPI’s method of determining pro rata assessments and charges. As noted in the Assembly Banking and Finance Committee’s analysis of this bill, “While the likelihood that the licensees will be satisfied with their respective assessment increases by providing transparency of the subtotals that comprise the non-exam revenue of programs, it may reduce confusion and implied claims of mismanagement.”

1. Related Legislation. AB 2028 (Chen) requires an invoice or assessment notice issued by DFPI to a deferred deposit licensee for the licensee’s pro rata share of the costs and expenses of administering the California Deferred Deposit Transaction Law to include the pro rata calculation used to determine the amount owed by the licensee. AB 2028 is pending hearing by this committee.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081