Consumer Financial Protection Bureau Director Richard Cordray said his agency is close to a deal to share data among state and federal authorities to probe abuses by banks and other financial services companies.
The accord will “establish a general framework to share data on consumer financial protection issues,” Cordray said in a speech to the National Association of State Attorneys General today in Washington.
The consumer bureau and states have formed staff working groups on areas of mutual interest, the former Ohio attorney general said. Close work with state law enforcement officials has been a signature bureau initiative since former Obama administration adviser Elizabeth Warren began setting it up in late 2010.
“We are meeting regularly to discuss the challenges posed to our mutual constituents by payday loans, foreclosure scams, auto loans, and debt collection,” Cordray said. “These substantive groups allow us to keep each other updated and to launch joint initiatives in areas where we share jurisdiction.”
State attorneys general have clashed with major banks, such as JPMorgan Chase & Co. and Bank of America Corp., over adherence to state consumer-protection laws.
The information-sharing deal focuses on using the Federal Trade Commission’s Consumer Sentinel network as a clearinghouse for complaints on financial services, said Roy Cooper, the attorney general of North Carolina.
’Critical’ Complaint Data
“Strong complaint data will be critical for us in detecting trends in scams and unfair lending,” Cooper said in an interview. “We hope that exchange goes both ways.”
Elizabeth Lordan, a spokeswoman for the FTC, said in an e-mail that “virtually all” state attorneys general can currently use the database, though not all states contribute information to it. In August the consumer bureau announced it had struck a deal to make complaints it collects accessible via this system.
Two attorneys general said their offices were not seeking confidential information gleaned from the consumer bureau’s supervision of financial services companies. In supervision, bureau officials examine the books and records of individual firms.
“We don’t see the states trying to elbow in on the supervisory authority so much as we see ourselves working on consumer protection,” Cooper, a Democrat, said.
Excluding Supervisory Information
Greg Zoeller, the attorney general of Indiana, echoed that point of view. “It’s not necessary for our office to have access to supervisory information,” Zoeller, a Republican, said in an interview.
Bank lobbyists have fretted that the consumer bureau might share supervisory information with state attorneys general.
Cooper also said that the plans for information-sharing with bureau render “moot” any worries about the status of data protected by attorney-client privileges, at least as regards the states.
Cordray has dismissed worries expressed by bank lobbyists that the bureau wouldn’t protect such information. He has also said he wouldn’t oppose legislation to explicitly preserve the privilege for information given to the bureau.
Cordray also called on state attorneys general to collaborate on a “national strategic plan” to address abuses in the debt collection business. Regulation and enforcement of debt collectors is shared between the states and the federal government. The consumer bureau and the Federal Trade Commission both work in this area at the federal level.
The consumer bureau announced plans on Feb. 16 to start federal supervision of some debt collectors.