CFPB Bolsters Enforcement Efforts by States

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On May 19, 2022, the Consumer Protection Finance Bureau (CFPB) issued an interpretive rule providing individual states with the authority to pursue and enforce companies that violate federal consumer protection laws.  This is a big win for states, who in the past have oftentimes been the first line of defense for consumers, but were not privy to use of federal consumer protections afforded at the federal level.  Director Chopra summed up the history involved in the making of this new rule in his remarks to the National Association of Attorneys General in December of 2021.  Click here for a recap of his speech, which provides informative historical perspective.

The new rule provides the following provisions:

  • States can enforce the Consumer Financial Protection Act, including the provision making it unlawful for covered persons or service providers to violate any provision of federal consumer financial protection law.This provision covers the Consumer Financial Protection Act itself as well as its 18 enumerated consumer laws and certain other laws, along with any rule or order prescribed by the CFPB under the Consumer Financial Protection Act, an enumerated consumer law, or pursuant to certain other authorities.
  • States can pursue claims and actions against a broad range of entities.The Consumer Financial Protection Act outlines entities over which the CFPB may exercise its enforcement authority under the statute. States are able to bring actions against a broader cross-section of companies and individuals.
  • CFPB enforcement actions do not put a halt to state actions.Sometimes states bring enforcement actions in coordination with the CFPB. A state may also bring an enforcement action to stop or remediate harm that is not addressed by a CFPB enforcement action against the same entity. Nothing in the Consumer Financial Protection Act precludes these complementary enforcement activities that serve to protect consumers at both the national and state levels.