Consumer protection law has long been a core part of keeping markets fair and competitive. And the consumer protection framework has always been a partnership between the federal government and the states. As our markets change, our federal and state laws must keep pace to deal with predatory practices, new actors, and other risks. Today, the CFPB released a report on how states can ensure their laws and regulations meet new consumer protection challenges, as well as a compendium of guidance documents that the CFPB has issued in recent years to address emerging challenges in the market for consumer financial products or services.
Many states have led the way on ensuring protections remain robust and relevant to modern schemes that take advantage of consumers, workers, small business owners, and others. For example, states have addressed large companies’ increased harvesting and monetizing of sensitive data and ensured that financial institutions’ lending, services, and investment activities meet the credit needs of their communities. It is critically important for policymakers to make sure that all state consumer protections are up to the task of dealing with new challenges.
Today’s report includes recommendations to states on how they can update their laws and regulations to meet evolving risks. The report includes potential legislative text to help states address common schemes in the modern economy, such as junk fees and abuse of sensitive personal data; authorize representative private claims to ensure viability of private enforcement; ban “abusive” practices in state law to prevent companies from obscuring product features or exploiting their market power; and more. Many of these suggestions mirror the recent work the CFPB has done to empower consumers and level the playing field for companies of all sizes.
The CFPB has worked closely with states in the last few years to ensure they have the information and support they need to carry out their duties and enforce the law. The CFPB has filed suits with state attorneys general against companies whose illegal practices cross state lines. The CFPB has pushed back on unwarranted preemption of state laws, including in credit reporting and small business lending. The CFPB has ensured that state enforcement agencies can make greatest possible use of their authority to directly enforce the Consumer Financial Protection Act. The CFPB also shares consumer complaints with cities, counties, and states.
Today’s report builds on decades of federal government work with state and local law enforcement to police unfair and deceptive acts or practices and directly assisting states in developing their own legislation and enforcement programs. For instance, the FTC released a model Unfair Trade Practices and Consumer Protection Act in 1967, which was rapidly adopted by states.
The compendium that the CFPB issued today contains guidance documents regarding the federal consumer financial protection laws that the CFPB has released in the last several years due to the evolution in the consumer financial markets. Congress spread enforcement responsibility for these laws among a large set of federal and state government agencies, including state law enforcement and regulators. These guidance documents reflect the considered judgment, reasoning, knowledge, and expertise of the CFPB.
Read the report.
Read the guidance compendium.
