The U.S. Consumer Financial Protection Bureau being created under the Dodd-Frank Act will join forces with state attorneys general to maximize protections against predatory lending and share enforcement costs, Obama administration special adviser Elizabeth Warren said today.
“We want to protect consumers from unlawful acts or practices,” said Warren, who announced a joint statement of principles at a National Association of Attorneys General conference in Charlotte, North Carolina. “We want to provide clear rules that improve the marketplace for consumers and remove unfair competition.”
Warren, 61, has courted the attorneys general as partners since President Barack Obama appointed her to set up the bureau in September. Under today’s agreement, the regulators will conduct joint training programs, share information and cooperate on enforcement “to the fullest extent permitted by the law,” according to a statement from the U.S. Treasury Department, which is housing the bureau until it starts work in July.
“I hope the days of playing us off against each other at the state and federal level are over,” Warren said. “There should not be daylight between us.”
The consumer bureau will help attorneys general financially by picking up the costs of preparing enforcement cases, such as writing legal briefs and hiring expert witnesses, Warren said. States will also get a budgetary boost from fines and penalties assessed in enforcement actions, she said.
“We want to be very mindful of our need to be helpful to the state attorneys general,” Warren said.
Some state attorneys general had asked Warren whether the consumer bureau would make grants of federal money available for state enforcement efforts.
Indiana Attorney General Greg Zoeller said in an interview that the consumer bureau should not “dictate” exactly how states use the money because of the administrative costs. “It’s not just the resources, it’s the strings that come attached to federal money,” Zoeller said.
Dodd-Frank, the regulatory overhaul law enacted in July, calls for the bureau to get a portion of the Federal Reserve’s operating budget amounting to about $500 million annually.
The federal and state regulators will seek “legal remedies to foster transparency, cooperation, and fairness in the markets for consumer products or services across state lines, without regard to corporate forms or charter choice,” Treasury said. They will also coordinate work on a consumer complaint system, according to the statement.
“People are hurt every day by unfair financial products,” North Carolina Attorney General Roy Cooper said in the Treasury statement. “Together, we can pose a greater deterrent to unscrupulous financial services providers,” said Cooper, who is chairman of the national attorneys general group.
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