Citing the need to defend consumer protection, a collection of U.S. state attorneys general is lobbying against the creation of a regulatory sandbox and expanded use of no-action letters by the federal Consumer Financial Protection Bureau (CFPB).
New York’s attorney general, Letitia James, is leading a group of 21 state AGs, which is calling on the CFPB to drop proposals that would allow firms to experiment with innovative products and services, and for the CFPB to use more no-action letters, which bind the bureau against taking enforcement action in certain cases.
The state AGs claim that the policies, “would erode critical consumer protections under the guise of fostering innovation in the consumer financial marketplace.” They say the proposals represent an “unprecedented departure” from the CFPB’s current approach to regulatory policy.
“The CFPB was created to protect consumers and ensure the financial stability of this country. These proposed rule changes would have the complete opposite effect – putting blind faith in the very industries and services they are supposed to regulate and correct. At a time when so many Americans are struggling to make ends meet, the CFPB should be focused on protecting consumers, not advancing regulations that could hurt them,” James said.