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CFPB says state attorneys general can enforce consumer law however they want

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CFPB says state attorneys general can enforce consumer law however they want

The Consumer Financial Protection Bureau is taking steps to pare back its enforcement activities, but Acting Director Mick Mulvaney said state regulators can police financial companies in their jurisdiction as they please.

Speaking at the U.S. Chamber of Commerce on March 1, Mulvaney said that while he would like the CFPB to "lead by example," the federal agency does not have a role in advising state attorneys general on how to enforce consumer protection laws.

Mulvaney added that when he spoke to attorneys general at an event earlier in the week, some were "unhappy" with his leadership at the CFPB, likely referring to AGs in mostly Democratic states disappointed by a perceived pullback in consumer protection enforcement at the federal level. In December 2017, 17 attorneys general wrote to President Donald Trump promising to "redouble" enforcement actions if Mulvaney blocked CFPB staff from pursuing cases.

"How they do that is up to them," Mulvaney said of state-level enforcement. The industry has already observed an increase in aggressive activity from state attorneys general.

Mulvaney broadly reiterated promises to review the agency's rulemaking and enforcement functions. On the payday lending rule, Mulvaney said the regulation is still undergoing review. On enforcement actions and outstanding consent orders, Mulvaney said the CFPB is reviewing all the cases to only pursue instances where there is a "solid legal case."

On the Dodd-Frank provision requiring the CFPB to collect information on the small business lending market, Mulvaney pointed out that the agency has a statutory obligation to do so, but faces difficulty in figuring out how to collect data. Mulvaney added that even former Director Richard Cordray was unsuccessful in following through on the mandate.

Mulvaney said there is no update on when Trump will name a permanent CFPB director, adding that he can serve in an acting role until June 2018. In the mean time, he said he would like to use his time as the agency head to motivate Congress to think about possibly reshaping the CFPB, particularly its single-director structure.

"If nothing else comes from my tenure, if Congress does see fit to look at the structure of the bureau that would be great."