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Financial Services Law Insights and Observations

CSBS, state regulators express concerns with CFPB taskforce RFI

Federal Issues State Issues State Regulators CFPB Preemption

Federal Issues

On June 1, the Conference of State Bank Supervisors (CSBS) submitted a comment letter in response to the CFPB’s Taskforce on Federal Consumer Financial Law’s request for information (RFI). As previously covered by InfoBytes, the taskforce issued the RFI in March seeking input on consumer protection areas for the taskforce to focus its research and analysis, and requesting suggestions for “harmonizing, modernizing, and updating the federal consumer financial laws.” In the letter, CSBS expresses significant concerns regarding the timing of the RFI due to the Covid-19 pandemic, as well as the content of the RFI itself. The letter conveys state regulator concerns over the RFI’s “inclusion of inquiries soliciting input on whether additional preemption of state laws and state regulatory authority is warranted” and highlights the absence of questions asking whether less federal preemption is warranted. According to the letter, “the inclusion of outcome-oriented questions focused on expanding preemption of state authority raises serious questions regarding the objectivity and mission of the Taskforce.” The letter also notes that state regulators and the CFPB have exercised “concurrent regulatory, supervisory, and enforcement authority,” while retaining independent authority, and that coordinated efforts have “fostered a more efficient and effective regulatory system.” The fact that former state regulators are not represented on the taskforce raises several concerns for the state regulators: “This spirit of coordination and collaboration does not seem to be reflected in the timing or content of the request for information, and we fear, the future work of the Taskforce,” the letter states.

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