State officials in Michigan are raising alarms about federal efforts to scale back the Consumer Financial Protection Bureau.
The agency formed after the 2008 financial crisis as a check on predatory lending practices and scams.
Michigan Attorney General Dana Nessel said it has been a great help to her office when it comes to taking on bad actors.
“It's really critical that we have those partnerships due to our limitation on resources, jurisdictional issues, and many other reasons that we count on the federal agencies to assist us,” Nessel said during a press conference Monday.
Part of the concern from Nessel’s office comes from what she describes as the gutting of Michigan’s own Consumer Protection Act. That came during state Supreme Court rulings in 1999 and 2007.
Nessel’s office is arguing to have some of those powers restored in a current Michigan Supreme Court case. Democratic state lawmakers also plan to reintroduce bills to strengthen consumer protection policies, despite them failing to gain any traction last legislative term.
In the meantime, Nessel and other officials say the CFPB has been critical in helping the state fill in the gaps. Former CFPB director Rohit Chopra agreed, saying states like Michigan can’t replace investigations into institutions like Capitol One or Wells Fargo, both of which the bureau recently dropped after President Donald Trump's return to office.
“The law does not really give the states the ability to prosecute fully those big national banks. And, on top of that, federal law enforcement helps get money back for everybody. I don't know if it's so efficient for there to be 50 different lawsuits against those firms or 50 different investigations,” Chopra said in Lansing at Nessel’s press conference.
Chopra is among the casualties of changes Trump’s administration has made to the CFPB since he retook office two months ago.
Last month, Trump fired Chopra. His administration has also directed the agency to scale back its work and tried to let go of dozens of staff.
Financial institutions and some economists, however, have criticized the CFPB for years as being too heavy handed and lacking accountability or oversight.
