(Phoenix, Ariz. – November 4, 2009) Attorney General Terry Goddard sent a letter to Congress today urging members to uphold the role of the states in enforcing consumer protection laws as part of the Consumer Financial Protection Agency (CFPA). The letter offers reasons for not preempting state laws and for supporting state enforcement of new CFPA regulations.
Goddard was joined in the letter by Attorneys General from 39 other states and territories.
In January, the National Association of Attorneys General called on the Obama administration and the 111th Congress to resist federal preemption of state laws, particularly in the enforcement of state banking and mortgage foreclosure laws.
Today’s letter requests that states be permitted to enforce the new agency’s regulations. “Allowing the states to enforce federal standards will maximize government resources, promote honest competition and deter potential violators,” the letter asserts. “We seek not to challenge federal authority but to enhance it and make it more efficient and effective.”
“States have long been active in protecting their consumers from financial fraud,” the letter continues. “The landmark predatory lending settlements against Household International, Ameriquest, and Countrywide returned hundreds of millions of dollars to victimized borrowers while forcing changes to lending practices. This experience uniquely suits us to assist federal regulatory agencies with their enforcement burden.”
A copy of the letter is attached.