California Consumer Privacy Law

The California Consumer Privacy Act (CCPA) began in 2017 as a ballot initiative. Due to concerns with it becoming law through the ballot process, the California Legislature enacted the CCPA on June 28, 2018, on the condition that the ballot initiative be withdrawn. In September 2018 the CCPA was revised to make technical corrections to its provisions and in 2019 was substantively revised, in part, to address concerns with the treatment of employees as consumers under the CCPA.

Generally speaking, the CCPA applies to every business that collects personal information on a California consumer and that either: (i) has gross annual revenues in excess of $25 million or (ii) annually receives the personal information of 50,000 or more California consumers. It requires such businesses to provide their California consumers information about the information the business collects about such persons, including its use, sale, or transfer. It further provides consumers the right to have such information deleted or to prohibit its sale.

The good news for mutual funds and other financial institutions is that Section 1798.145(e) of the CCPA provides a broad exemption that would cover all information such institutions hold on their consumers/customers. Additionally, in 2019, exemptions were added to the CCPA to largely carve out of the Act’s coverage information the businesses collect on their employees and the employees of other businesses in the course of doing business with such other entities (e.g., information collected on key persons when conducting due diligence of other businesses). Notwithstanding these broad carveouts for employee information, employers do have some disclosure obligations to their employees. These exemptions, including employers’ remaining disclosure requirements, are discussed in detail in Analysis of the GLBA and Employees Exemptions in the California Consumer Privacy Act, which is also available below under Compliance/Implementation Resources for Investment Companies.

• 2020 California Ballot Initiative: California Consumer Right to Privacy Act of 2020 (pdf) - As filed with California Attorney General, Sep 23, 2019
• Recordkeeping Requirements for a Mutual Fund Complex (pdf) - Aug 20, 2018
• 2017 California Ballot Initiative: The Consumer Right to Privacy Act of 2018 (pdf) - As filed with California Attorney General, Nov 17, 2017
• Privacy of Consumer Financial Information: Mutual Fund Compliance with Regulation S-P (pdf) - Jan 31, 2001