The economic toll of the coronavirus pandemic is not just being felt by individuals. Branches of government at all levels are now starting to feel the impact of lost revenue and increased expenses that have resulted from the crisis and are starting to scale back previously announced plans to make up for the shortfalls, including plans that would have impacted the accounts receivable management industry.
For example, a plan to create a state version of the Consumer Financial Protection Bureau in California is likely a “pipe dream” as that state wrestles with a $54 billion deficit that has been caused by COVID-19. California was planning on spending $10 million to create the agency, which would have regulated the debt collection industry. The plan was for California to overhaul its Department of Business Oversight to create a Department of Financial Protection and Innovation. It had even asked Richard Cordray, the former director of the CFPB, to help create the unit.
Many other states, including New Jersey and Pennsylvania to name two, have created their own consumer protection units, seeking to fill a perceived void they felt was being left by the CFPB not engaging in as many enforcement actions as it did when Cordray was running the agency.
California Gov. Gavin Newsom is expected to release his budget proposal this week, at which point the state legislature will have about a month to get a state budget finalized.
“My optimism is conditioned on this — more federal support,” Newsom said, according to a published report
