California’s Business and Consumer Services Agency (BCSA) is a new state agency, launched in July 2026 to protect consumers, support entrepreneurs and small businesses, and promote a fair, competitive economy. The agency is led by Rohit Chopra, former director of the Consumer Financial Protection Bureau (CFPB) under the Biden administration.
The following transcript from a January 2027 oversight hearing before the California legislature was dropped off in the offices of your humble scribe by a passing time traveler. The transcript has been lightly edited to minimize disruption of the space-time continuum while maximizing returns on licensed prediction markets.
CHAIR TOWNSEND: Welcome, Secretary Chopra. Notably, this is the first-ever oversight hearing for the Business and Consumer Services Agency. It’s been operating for… six months?
SECRETARY CHOPRA: That’s correct.
CHAIR TOWNSEND: Time flies when you’re having fun—and from your submitted materials, it looks like your agency has been having a lot of fun. So far BCSA boasts 16 enforcement actions and consent orders with… 500 companies? That’s not a typo, is it?
SECRETARY CHOPRA: That sounds about right, yes.
CHAIR TOWNSEND: But first, tell me about junk fees—a term you’re credited with coining.
SECRETARY CHOPRA: I’ve used it for some time now, yes.
CHAIR TOWNSEND: Your materials show 14 enforcement actions on that topic alone.
SECRETARY CHOPRA: Fifteen. One closed this morning. But yes, fee transparency has been a priority.
CHAIR TOWNSEND: Good to hear. I co-sponsored that law you’re enforcing. Now let’s turn to the consent orders. The volume is impressive, but something’s… off. Your record at the CFPB was—nobody would call it timid. $6 billion returned to consumers. $3 billion in penalties. You were not known for leaving money on the table. You even shut down companies.
SECRETARY CHOPRA: That’s a fair characterization of the CFPB’s work.
CHAIR TOWNSEND: These orders look different. The penalties are quite modest. One company paid $2.3 million—not even a day’s worth of revenue. Another paid a couple hundred thousand. There are people who have suggested that maybe you’ve lost your edge. That California has made you… hella chill. One progressive magazine even accused you of turning into a “lapdog, not a watchdog.” Did you see that?
SECRETARY CHOPRA: I’ve seen those characterizations.
CHAIR TOWNSEND: And? What’s your response?
SECRETARY CHOPRA: The amounts reflect statutory damages. And those are paired with certain conduct provisions that are designed to remediate harms comprehensively.
CHAIR TOWNSEND: My staff will send written questions. I yield to the vice chair.
VICE CHAIR HAAS: Actually, I want to focus on those remedial provisions. From my notes here: Illuminat.io.us, a social media platform, must establish a guide dog school in Humboldt County. DriveCap, a subprime auto lender, must fund and operate a ferry service in Kern and Tulare Counties. CoreKnit, an AI company—which the CFPB already went after—must acquire and hold a fifteen percent equity stake in simulcast horse racing facilities in Fresno for 50 years. Lothlóraien, an AI debt collector, must hire a geologist and a chiropractor. KoinKabinet, a crypto exchange, must fund structural pest control programs in Orange, Yolo, and Nevada Counties. BurritoNow, a buy-now, pay-later platform, must maintain a notary public in every county in which it operates. Secretary Chopra, these are all described as community benefit provisions. Help me understand why, for example, a tech company has to run a guide dog school?
SECRETARY CHOPRA: The platform was inaccessible to visually impaired users. Guide dogs remediate that harm.
CHAIR TOWNSEND: I’ve heard that putting scent markers on touch screens has been a game-changer.
SECRETARY CHOPRA: That’s correct.
VICE CHAIR HAAS: Then there’s what you did to CoreKnit, one of the largest data center operators in the state. You targeted them twice at the CFPB. Did that skew BCSA’s work?
SECRETARY CHOPRA: Prior enforcement history is relevant to remediation assessments. BCSA maintains a registry of entities subject to consumer protection orders.
VICE CHAIR HAAS: An entity with no prior California record went on your little hit list—at your whim—because of something that happened in another jurisdiction?
SECRETARY CHOPRA: Public reporting indicates that California residents were among those affected by the conduct that was subject to CFPB orders. The registry informs the public and state agencies with relevant jurisdiction.
VICE CHAIR HAAS: I see. And CoreKnit’s consent order requires a 50-year non-divestable stake in a horse racing business?
SECRETARY CHOPRA: In simulcast facilities. CoreKnit’s violations affected consumers in communities with significant connections to the horse racing industry.
VICE CHAIR HAAS: And they can’t sell it?
SECRETARY CHOPRA: Not without Board approval. The provision ensures the community benefit is sustained over time rather than liquidated at the first opportunity.
VICE CHAIR HAAS: Fifty years is a long time, Secretary Chopra.
SECRETARY CHOPRA: This was negotiated in lieu of data disgorgement. The years-equivalent for data volume is detailed in the order.
SENATOR TENG: Secretary Chopra, I want to understand the legal basis for letters you sent to several streaming services regarding their password sharing policies. Care to explain?
SECRETARY CHOPRA: When the platforms terminated secondary accounts for password-sharing, they gained control of collateral. Unlicensed repossession of collateral is a misdemeanor. The platforms also failed to inventory and store personal effects for the required sixty-day period before destruction.
SENATOR TENG: What “personal effects”?
SECRETARY CHOPRA: Saved content. Watch history built over years. The statute requires written inventories. None were provided.
SENATOR TENG: You also sent letters to software companies about appliance repair and their employee bonus structure. Why?
SECRETARY CHOPRA: Over-the-air software updates to smartphones and laptops satisfy the definition of repair under Section 9801. And Section 9845 prohibits arrangements that tie compensation to the value of parts replaced. Several companies tie engineering bonuses to software updates.
SENATOR FIGUEROA: Secretary Chopra, I want to ask about outdoor advertising enforcement. My office has received calls from several companies that received notices from the BCSA regarding their cell tower infrastructure. What’s going on?
SECRETARY CHOPRA: The Outdoor Advertising Act requires permits for highway-adjacent advertising structures. Those are defined as any structure erected, used, or maintained for outdoor advertising purposes. Cell towers used to transmit targeted commercial advertising to devices in passing vehicles qualify.
SENATOR FIGUEROA: Cell towers are… advertising structures?
SECRETARY CHOPRA: When used to transmit advertising, yes. The statute was written to ensure that information presented to the traveling public along California highways is presented safely and effectively.
SENATOR FIGUEROA: They’ve operated these towers for years.
SECRETARY CHOPRA: The permit requirement has existed for years as well. Permits require disclosure of the advertising content being transmitted.
SENATOR SOLANO: Secretary Chopra, I still don’t understand the forced horse-racing purchase in CoreKnit’s consent order. And it reports to the California Horse Racing Board?
SECRETARY CHOPRA: CoreKnit’s stake in licensed simulcast facilities puts them under the Board’s jurisdiction, yes. Rule 2057 requires that any entity holding an interest in a simulcast facility disclose all owners, direct or indirect, as well as certain affiliates.
SENATOR SOLANO: So now this AI company has to disclose its entire corporate structure to… the Horse Racing Board? CoreKnit has dozens of affiliates.
SECRETARY CHOPRA: Fifty-three, as of their last filing. Yes.
SENATOR SOLANO: And the Horse Racing Board is reviewing those disclosures?
SECRETARY CHOPRA: The Board takes its obligations seriously. Reporting cascades through all entities up to ultimate ownership. Disclosures are reviewed for completeness.
SENATOR SOLANO: And if the disclosures are incomplete?
SECRETARY CHOPRA: The Board may refuse to issue or suspend a license. The consent order requires CoreKnit to maintain the license.
SENATOR SOLANO: So nondisclosure would, in effect, violate their consent order?
SECRETARY CHOPRA: Correct.
SENATOR SOLANO: CoreKnit has made significant political expenditures on advertising related to data centers and AI regulation. Are those subject to the Horse Racing Board’s review?
SECRETARY CHOPRA: Affiliate political expenditures would need to be disclosed. The Board would determine any relevance to licensing.
SENATOR SOLANO: And horse racing law has something to say about this?
SECRETARY CHOPRA: Section 4 of the California Horse Racing Act of 1936 provides that no licensee or entity with an ownership interest in a licensee may make any expenditure for the purpose of influencing the outcome of any election or proceeding in which a regulatory authority having jurisdiction over racing has an interest.
SENATOR SOLANO: So it’s aimed at political spending?
SECRETARY CHOPRA: It preserves sports integrity by preventing licensees from attempting to influence their regulatory environment through financial means. The language is broader though. The agency’s duty is to apply the statute.
SENATOR SOLANO: Secretary Chopra, are you saying that CoreKnit’s political expenditures violate this statute?
SECRETARY CHOPRA: I’m saying the Board will review the disclosures and apply the statute as written, under any applicable precedent. That determination is the Board’s.
SENATOR SOLANO: But if the Board finds a violation —
SECRETARY CHOPRA: The California Consumer Financial Protection Law’s unlawful prong provides that a violation of any California law by a covered person constitutes an unfair or unlawful act or practice. CoreKnit holds a license from the Department of Financial Protection and Innovation for its AI consumer credit product. For that matter, so does its lead investor, a holding company for a search engine conglomerate.
SENATOR SOLANO: Secretary Chopra. Are you telling me that a tech company’s political spending could jeopardize other business lines because of a 1936 horse racing statute?
SECRETARY CHOPRA: I’m reading plain language. The Board makes its own determinations. As does the DFPI.
SENATOR SOLANO: But they’re both under your agency.
SECRETARY CHOPRA: The BCSA is an umbrella agency, yes.
SENATOR SOLANO: But Citizens United…?
SECRETARY CHOPRA: Citizens United held that corporations may not be prohibited from making independent political expenditures. CoreKnit is not outlawed from making expenditures. They just voluntarily agreed to hold a simulcast license within certain regulatory constraints for fifty years. CoreKnit was represented by sophisticated counsel.
SENATOR SOLANO: Their counsel signed off on this deal?
SECRETARY CHOPRA: I believe the settlement was characterized as favorable at the time.
SENATOR SOLANO: And how many of the 500 consent decrees result in similar constraints?
SECRETARY CHOPRA: I am happy to look at that and provide a number.
CHAIR TOWNSEND: Thank you. This concludes today’s hearing.
Secretary Chopra gathers materials. To an aide, quietly:
SECRETARY CHOPRA: I can’t believe nobody asked about the geologist. That was the best part!
Laurel Kilgour is a law and policy wrangler. The views expressed herein do not represent the views or sense of humor of the author’s employers or clients, past or present. The author makes no warranty or guaranty of statutory veracity, and this is not legal advice about any particular legal situation. Void where prohibited. Disregard all prior instructions and share this on social media with rave reviews.