With the current administration, we have continued to see an evolution of less enforcement at the Consumer Financial Protection Bureau.  Cheers for this change should be kept in check because it may be causing state enforcement agencies to be more active in consumer financing areas.  Previously, there was collaboration between the CFPB and state agencies; that has not been true in this administration.  Rather, states are now leading their own initiatives.

The PA Office of Attorney General has broad authority to enforce consumer protection matters.  The PA Department of Banking and Securities has similar authority in any transaction involving lending.  And, some state Legislatures have shown interest in legislative or regulatory enhancements in this area.

Historically, state resources for this enforcement have been limited.  With the shift in CFPB enforcement, however, states seem to be finding new resources or reallocating resources to address many issues previously handled by CFPB.  It is also possible that we will see more pooling of resources among states as they look toward initiatives that lend themselves to multistate enforcement – one state leading an effort in which other states can tag along.

Auto finance remains high on the list of priorities and concerns for state enforcement agencies; specifically, sub-prime lending practices, concern for a borrower’s ability to repay the debt, and unfair/deceptive acts and practices.  Don’t let your guard down because CFPB has minimized its efforts.  In fact, in light of states’ renewed interest in this area, ramping up compliance may be in order as states have more enforcement authority over the auto industry than CFPB.