Additional state AGs monitoring federal rollback in regulations August 28, 2018 A growing number of states are monitoring the actions of the Bureau of Consumer Financial Protection (BCFP) as the federal agency shifts it focus from rulemaking by enforcement to a more pragmatic way of operating with inclusive rulemaking plus a focus on educating the consumer. As Newsbriefs reported in June, Pennsylvania, Maryland, Tennessee and New Jersey all were undertaking varying degrees of consumer protection activity while the shift in federal philosophy begins to gain traction. Pennsylvania, for example, under Attorney General Josh Shapiro, has established a mini-BCFP as part of his office and brought in four former BCFP staffers who worked under former Director Richard Cordray at the Bureau. Cordray was appointed by President Obama as the new agency’s first Director. After Cordray left last November, President Trump appointed Mick Mulvaney, who currently serves as Director of the Office of Management & Budget (OMB), to be Acting Director of the BCFP. In June, President Trump nominated Kathy Kraninger to be the permanent director, and last week the Senate Banking Committee voted along party lines to send Ms. Kraninger’s nomination to the full Senate floor for consideration and a subsequent vote. But those four states aren’t the only ones focusing on consumer financial protection. Three additional states have set up some form of a financial services protection unit inside the Attorney General’s office, according to Patty Covington, an attorney for Hudson Cook who specializes in consumer finance law and regulation. Those states are: Georgia, South Carolina and Virginia. “State AG investigations and enforcement actions continue to proceed without interruption,” she noted. “However, it’s unlikely other state attorneys general will form additional consumer financial units until after the elections in November.” A total of 30 states will have races for attorney general in November with 18 Republicans and 12 Democrats up for re-election. Additionally, four states have gubernatorial elections where the governor appoints the AG. In Maine, the state legislature appoints the AG. The results of those elections could determine if state AG offices continue to set up consumer protection units. On a parallel track, the state AGs remain vocal on consumer protection policy issues. In the spring, a group of 16 Democratic AGs submitted a comment letter to the BCFP in response to its Request for Information regarding its Civil Investigative Demand and Associated Processes. In their letter, the state AG’s supported the BCFP’s “historical and continued use of civil investigative demands” and strongly opposed any curtailment of the BCFP’s investigative authority. Earlier this summer, state Democratic AGs sent a letter to Congress urging it not to vote for the joint resolution effectively repealing the BCFP’s 2013 auto guidance. The joint resolution passed in both houses and was signed by President Trump. In June, five Democratic AGs sent a letter to the BCFP responding to its request for information concerning changes to the BCFP Consumer Response portal. And in July, 21 state AGs sent a letter to the Senate majority and minority leaders opposing House bills (HR 3299 and HR 4439)—which are aimed at reversing a court decision putting into question certain loans that are made by banks and later sold to non-banks. While there was an increase in AG activity after the formation of the BCFP in 2011, Covington says that the fire has been stoked with the advent of the Trump Administration and perceived pull-back of the BCFP. She adds that states were further encouraged by Mulvaney in March during a speech at the National Association of Attorneys General, to collaborate and lead with respect to bringing enforcement actions.