Consumers Win: New Rule Expands State Power to Protect Consumers

CFPB rule means states can aggressively pursue bad actors

Andy Spears


Photo by Tingey Injury Law Firm on Unsplash

A new rule generated by the Consumer Financial Protection Bureau (CFPB) expands state authority to use the federal Consumer Financial Protection Act of 2010 to protect consumers by prosecuting bad actors.

The consumer protection attorneys at Finn Law Group explain that the law will serve to enhance existing consumer protection efforts and remove previous barriers to state action.

States Get Boost To Enforce CFPA (

States can now bring a wider range of litigation against companies and individuals, according to the ruling. This news comes at an important time for those who have been victims of financial crimes. Not only will the CFPB be there to help, but states will also be able to step in and provide justice where prior, they would not have had the ability.

The Bureau is asking states to consider new enforcement actions against non-bank lenders and FinTech companies. In recent years, state authorities have struggled to take action against these corporations for a variety of consumer protection violations.

The bottom line: Today’s CFPB is taking a bold stand in favor of consumers and putting industry on notice the nation’s consumer protection laws will be enforced.

Here are some recent examples of Fintech industry malfeasance:

Stopping these innovative bad actors and protecting consumers certainly seems to require coordination between the CFPB and state agencies. Now, that coordination can more easily happen.

An End to Hide-and-Seek

Finn Law explains the benefits of this rule:

In the past, many companies have used their size and influence to skirt state consumer protection laws by claiming that they are governed only by federal law. The CFPB’s new interpretive rule will put an end to this legal hide-and-seek and give states the authority they need to pursue violators of consumer protection laws.

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .