Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, stated in a speech in February that the bureau plans to increase coordination with state attorneys general in enforcing federal consumer financial protection law.
Mulvaney made the remarks in Washington, D.C. at the winter meeting of the National Association of Attorneys General. Video of Mulvaney’s remarks can be seen here.
Mulvaney indicated that the CFPB would no longer be “pushing the envelope” or “regulating via enforcement actions.” The bureau, he said, has learned from several recent unsuccessful efforts in federal court in which its interpretations of rules and regulations were questioned. In the future, Mulvaney said, the CFPB would make sure that firms “know what the rules are before we accuse them of breaking those rules.” He also stated that the CFPB’s primary interest is to expend its efforts on cases that are “on solid legal grounds” and not on “creative claims.”
Mulvaney indicated that the bureau would look to collaborate and support state attorneys general in deciding what enforcement actions to take. Mulvaney stated that, going forward, a state’s decision to initiate an enforcement action would be a significant factor in determining if the bureau would also do so. He stated that if state AGs “are not bringing an action we are looking at, I’m going to want to know why.” He suggested it could be due to a lack of resources, or it could be that the state AG simply did not think the conduct under review falls outside the law.
Mulvaney reminded his audience that Section 1042 of the Consumer Financial Protection Act authorizes state AGs and regulators to bring civil actions to enforce provisions of the CFPA, including the oft-cited prohibition of unfair, deceptive or abusive acts or practices. A state is required to notify the CFPB when it intendeds to act, and the CFPB may intervene as a party and remove an action filed in state court to federal court. However, Mulvaney indicated that he does not plan to “get in the way” of states seeking to bring such actions.
State enforcement has already increased during the last two years, from approximately 20 actions in 2016 to nearly three times that in 2017. With more than 30 state AG elections races taking place in 2018, the number of enforcement actions could increase substantially as the CFPB’s less aggressive approach under the Trump administration becomes a campaign issue.