Department Of Financial Protection and Innovation Defense (Formerly the DBO)

The Department of Financial Protection and Innovation (formerly the Department Of Business Oversight or DBO) is tasked with protecting consumers by carefully monitoring financial service providers and products. The DBO supervises a wide range of state-licensed financial institutions from banks and credit unions to financial service providers and advisers, consumer financial lenders, and many others.

What Does the Department of Financial Protection and Innovation Do?

The Department of Financial Protection and Innovation (DFPI) is an organization that serves Californians by overseeing financial transactions to prevent marketplace risk, fraud, and abuse. The DFPI monitors financial institutions such as banks, credit unions, and other finance companies that provide money services. The DFPI also licenses and monitors financial agents and agencies which include investment advisors, securities brokers, various lenders, and specific fiduciaries.

The DFPI’s stated purposes include:

  • Promoting fair and honest business practices
  • Enforcing financial laws and regulations
  • Supporting consumer awareness
  • Protecting consumers

Basically, all California businesses that provide financial services of any kind are subject to monitoring and enforcement by the DFPI. If you are facing a complaint from the DFPI, it is important that you act quickly.


The DFPI/DBO accomplishes this supervision through a comprehensive licensing scheme, in which applicants are evaluated. Some may be denied as a result of past criminal history, financial and legal issues, discipline by another agency, or other violations of the laws substantially related to DBO activities.

S J Harris Law has extensive experience in working with agencies like the DBO and financial professionals who may be denied a license by the DBO.

It is important to consult an attorney like Scott J. Harris, Esq. prior to making an application for licensure, or if the DBO has denied you a license. If you have a criminal conviction in your past, have had a license or certification disciplined by the SEC, FINRA, a Department of Insurance, National Multistate Licensing System (NMLS), or a Department of Real Estate, or have had personal legal and financial troubles, you should consult an attorney before and during your application process.


When a licensed financial professional or lender is accused of a criminal or administrative law violation or receives a serious consumer complaint, the Department of Financial Protection and Innovation launches an investigation. This can sometimes result in the suspension or revocation of a professional license. While this is never an ideal situation for a licensed professional, there are steps you can take to fight disciplinary actions taken against your license.

Attorney Scott J Harris is experienced in defending professional licenses threatened by the DBO, and in fighting for clients whose licenses have been denied. Below you’ll learn key facts about Department of Business Oversight license defense, and how our experienced DBO license attorneys can help defend your license and your rights.

Common Reasons for DFPI/DBO Investigations

The most common reason the California Department of Business Oversight launches an investigation is in response to a consumer complaint. Accusations like fraud, negligence, or unprofessional conduct will almost always lead to a formal DBO investigation. In addition, if the DBO discovers that a licensed professional has violated California Finance Lenders Law or failed to report a known violation, they will begin an investigation.

It is essential that any financial service provider or lender who is convicted or accused of a crime, or has knowingly violated the law, reports this information to the DBO immediately. Failing to disclose a conviction is grounds for revocation or denial of your professional license but being open with the DBO may help your case.

One important caveat to keep in mind is that although disclosing criminal charges is necessary, the accused or convicted party should only report the information required without providing additional details. If you need help determining what to report, the best course of action is to consult with a Department of Business Oversight license defense attorney.

What to Do if Your License is Denied

The Department of Financial Protection and Innovation thoroughly investigates all license applicants and denies licenses for a variety of reasons. If they discover criminal convictions, financial issues, or untrue statements on the applicant’s license application, their license could be denied.

If your license application is rejected, you will receive a Statement of Issues from the DBO. At this point, you must file a Notice of Defense within 15 days of the postmark date on the notice if you want to challenge the denial. If this happens to you, a proven DFPI defense attorney like Scott J Harris can help you meet the burden of proof required during your hearing.

What to do if You Receive an Accusation from the DFPI/DBO

If you receive a formal Accusation from the DBO, it is an indication that they intend to suspend or revoke your license. At this point, you have 15 days from the date the Accusation was served to file a Notice of Defense.

By filing this notice, you state your intent to challenge the Accusation through a hearing. If you miss the submission deadline, however, your license will be immediately suspended or revoked. It is in your best interest to work with a lawyer during this process to ensure that your paperwork is promptly and correctly filed. In addition, the process surrounding Accusations can be overwhelming and confusing. Having the guidance of an experienced lawyer can make the experience much more manageable.

Although Accusations are very serious, working with a seasoned attorney is the best way to avoid potentially losing your license. Often, a lawyer will be able to reach a settlement agreement known as a Stipulation Agreement to help keep your license active if you are willing to practice with restrictions. An experienced Department of Business Oversight license defense attorney can guide you through the process with as little stress as possible.

What Happens During a DFPI Hearing?

If you are not granted a settlement for your Accusation, you will participate in a formal hearing before an Administrative Law Judge at the California Office of Administrative Hearings. During the hearing, your lawyer will share your side of the story and present any relevant evidence to the judge. The judge’s final decision will be communicated to you in a written Proposed Decision approximately one month after the hearing concludes.

At this point, the DBO can choose to accept the judge’s decision, modify it, or reject it. The accused may appeal the final decision through a formal filing process. Again, it is best to work with a lawyer with the knowledge and experience to help you get the best possible outcome for your case.

DFPI/DBO Investigation Outcomes

After an investigation concludes, the DBO may choose to take several different courses of action. They could close the complaint, issue a citation, or refer the issue to their Legal Division. If the issue is referred, the Legal Division will decide whether the evidence warrants filing a formal Accusation. Finally, if the case involves criminal conduct, the DBO could refer the case to the District Attorney’s Office for criminal prosecution.

If you are facing investigation, having a Department of Business Oversight license defense attorney in place to fight for your rights and your license is crucial. If you are in need, don’t hesitate to contact California DBO defense attorney Scott J Harris for help determining the most appropriate course of action for your case.

What is the Nationwide Multistate Licensing System (NMLS)?

NMLS is a platform for regulatory agencies to process license applications and ensure compliance from licensees. NMLS allows agencies to process applications for initial licensing, renewals, amendments, and surrenders of licenses. NMLS is used by money service providers, including:

  • Mortgage lenders
  • Mortgage loan originators
  • Money services
  • Money transmitters

NMLS helps streamline the licensing process as it uses common tools and processes for all states and industries that use it. This allows for individuals to more easily seek and obtain licensing in multiple states. NMLS allows for exam registration, payments, licensee reporting, and renewal. NMLS is based online, allowing all of its processing to be done digitally.

What Happens if You Violate the NMLS Rules of Conduct for Education Students?

Pursuant to the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), all mortgage loan originators (MLOs) must successfully complete both prelicensing education (PE) and continuing education (CE) to obtain and keep an MLO license. All state MLO education courses must be approved by the NMLS and all licensees must follow all NMLS rules regarding education courses to ensure educational integrity. The NMLS has established the Rules of Conduct (ROC) to ensure that all NMLS-approved educational courses are given and completed honestly. All individuals that take educational courses related to MLO licensing must adhere to the following rules:

  1. Be the person he or she contends to be, and that all of his or her course registration information is accurate.
  2. Acknowledge that he or she will be required to show a current government-issued form of identification prior to and during the course.
  3. Acknowledge that the SAFE Act and state law require students to spend a certain amount of time in various subject areas. Agree that there will be no attempt to circumvent NMLS rules regarding required coursework time.
  4. Agree to not share login information with anyone else for any online course.
  5. Agree to not seek any outside help to complete a course.
  6. Agree to not help anyone that is taking an NMLS PE or CE course.
  7. Agree to not engage in any conduct that can disturb or distract another student’s learning.
  8. Agree to not engage in any behavior that leads to bad character, reputation, or would lead the public to believe that he or she would not conduct MLO business lawfully, honestly, or fairly.
  9. Agree to not engage in any dishonest or fraudulent conduct that could negatively impact the integrity of a PE or CE course.

If an individual is suspected to have broken any of the above rules, then the NMLS and Multi-State Regulatory Taskforce can take action against an individual’s MLO license. The first thing that a licensee who is suspected of dishonest conduct will receive is an email sent by the DFPI alerting the licensee that the DFPI has information that implicates the licensee. Licensees are required to provide full and truthful disclosures to any questions that are posed by the DFPI. If a licensee fails to provide the requested information or submits untruthful answers to the questions posed, then more severe action can be taken against the individual and his or her MLO license. This can result in license sanction, orders of restitution, or the issuance of a monetary penalty.

How to Reinstate a Revoked License

If your license is revoked, a DBO license defense attorney can help you file a Petition for Reinstatement. In addition to filing this form, you and your lawyer must provide convincing evidence to support the reinstatement of your license.

The most convincing forms of evidence are those that show you have taken steps to rehabilitate yourself from your past misconduct. Regardless of the action that caused your license to be revoked, you can provide letters of support from superiors and co-workers, proof that you have participated in rehabilitative services or counseling, or other relevant documentation, depending on your case.

If you are currently experiencing difficulties with your license, a California DBO license attorney can help. Get in touch with Scott J Harris for a free consultation at 323-794-0701.