A Level Playing Field for Consumer Financial Products and Services

Today, I addressed the National Association of Attorneys General. It was good to see some old friends and new faces – State attorneys general from around the country. Prior to coming here, I had the honor of serving as Ohio’s Attorney General. In that role, I had the privilege of being on the front lines of consumer protection, and that experience is one reason I was excited and proud to join the new consumer bureau.

From left to right: Richard Cordray (CFPB Assistant Director for Enforcement) – Roy Cooper (Attorney General for North Carolina)

State attorneys general will be an important partner for the Bureau because they understand as well as anyone the kinds of problems that consumers – their constituents – face. There’s another reason, too: Congress has emphasized that we are to enforce Federal consumer financial law consistently, without regard to whether a financial services provider is a depository institution or not, in order to promote fair competition. That work will require the sustained collaboration of State and Federal regulators, including both the consumer bureau and State attorneys general.

With new technology and fierce competition, financial services companies are developing new and fast-changing products and services that cut across existing regulatory frameworks. Leveling the playing field by treating the participants in the marketplace on par, regardless of their corporate structure or charter choice, is a new approach that will benefit both consumers and financial companies. If we learned anything from the financial crisis, it is that gaps in Federal oversight can contribute to systemic failure by allowing unwarranted and unsustainable risks to be created in the economy.

Of course, State attorneys general also know that leveling the playing field across different kinds of financial providers and products and services is essential and will require sustained resources. Tens of thousands of so-called “non-bank” companies offer consumer financial products and services – they just don’t take deposits like a bank or thrift. These companies need to be subject to similar oversight and enforcement as banks if they are competing for customers with similar products and services in the same marketplace. Our nation has always maintained independent funding for bank regulators apart from the political process – and the consumer bureau, charged with regulating both banks and non-banks, has been set up the same way.

The consumer bureau will depend on the expertise and experience of State attorneys general as we work together to protect consumers. We will be more effective and efficient because of this partnership, and I know my visit with the State attorneys general today is another step toward a sustained effort to insist on fairness in the marketplace.

Richard Cordray is the CFPB Assistant Director for Enforcement

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