In a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, Republican members of the House Financial Services Committee accused him and the CFPB of conspiring with states’ attorneys general to pursue “duplicative enforcement actions.”
The letter was signed by committee ranking member Rep. Patrick McHenry (R-N.C.), Rep. Blaine Luetkemeyer (R-Mo.), the ranking member of the Subcommittee on Consumer Protection and Financial Institutions, and Rep. Tom Emmer (R-Ind.), the ranking member of the Subcommittee on Oversight and Investigations.
The accusation comes after several interpretive rules from the CFPB encouraged and authorized states to participate in consumer financial protection law enforcement.
“While Congress intended for the CFPB to enforce federal consumer financial laws and protect consumers in the marketplace, it did not intend for the CFPB to intimidate companies by conspiring with state agencies to pursue duplicative enforcement actions,” the letter read. “The Dodd-Frank Act limits the attorney general in bringing a federal enforcement action.”
Pursuant to the Dodd-Frank Act, a state attorney general or state regulator “shall timely provide a copy of the complaint to be filed and written notice describing such action to the bureau and the prudential regulator.” In response to this notice, the CFPB may intervene as a party in the action, and upon intervening “remove the action to the appropriate U.S. District Court, if the action was not originally brought there.” The CFPB may also “appeal any order or judgement, to the same extent as any other party in the proceeding may.”
The letter continues: “It is clear that state attorneys general may enforce the [Consumer Financial Protection Act] (CFPA) in cases where the CFPB has not. But the statute does not allow for a state attorney general to become a party to an existing CFPB enforcement action. It is therefore inappropriate for the CFPB to recruit a state attorney general that is not otherwise investigating a company to pursue enforcement as a means of intimidation.”
In substantiating their allegations, the letter noted that during a seven-month span, Chopra spoke with state attorneys general on 23 occasions.
The signers of the letter express concern that the effect of these interpretive rules is different from enforcing the CFPA. “It is more akin to deputizing state attorneys general to enforce the CFPA on behalf of the CFPB – something Congress did not authorize.”
The Republic congressmembers asked the CFPB to provide responses to specific questions and related documents to the committee regarding the relationship between the CFPB, the power it is vesting in state attorneys general, and the legal authority provided by the CFPA.