California Banker Issue 2 2025

he United States has the most diverse and robust bank ing sector in the world and is represented by banks of T California State Charter Under Attack By Kevin Gould, president and CEO, California Bankers Association

dual banking system, which pro vides bankers with a choice of op erating under a national charter or a state charter. Unfortunately, the Cal ifornia state charter is under attack and its value proposition is dimin ishing. Just this year, several Cali fornia legislative measures explicitly target state-chartered banks or will be preempting limiting the measure’s application. One such measure allows the com missioner of the Department of Fi nancial Protection and Innovation to enforce violations of the federal Dodd-Frank Act (DFA) through un fair, deceptive, abusive acts or prac tices claims. Proponents claim that

this measure is necessary because the Consumer Financial Protec tion Bureau (CFPB) under President Trump’s administration will not en force DFA. The reality is that the commission er already possesses this authority; however, to deploy it, the commis sioner must provide notice to the CFPB, which may become a party to the action and/or can seek to remove the action to federal court. The ra tionale behind this potential inter vention is to avoid duplicative and uncoordinated enforcement actions. Large big box retailers are pushing a measure to limit the charging of

all sizes that serve every segment of the American economy. The na tion’s 4,700 banks include commu nity banks, midsize banks, regional banks, and large banks. Banks of every size add unique value and are critically important to our financial system, and our economy. While banks may have different business models and strengths, institutions succeed when they meet the needs of their communities. Part of what makes the United States’ banking system special is the

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