Director Cordray attended a meeting of the National Association of Attorneys General yesterday, delivering some prepared remarks and answering questions from the state AGs in attendance. Here are the highlights – statements that give us a clue about what the CFPB and the AGs will be joining forces to do in the near future:
- A new information-sharing MOU. The CFPB is going to present a new Memorandum of Understanding to the state AGs, “to establish a general framework to share information on consumer financial protection issues.” We haven’t seen the MOU yet, and until we do, the prospect of information-sharing between the CFPB and the state AGs will continue to unsettle everyone in the industry because of the possible sharing of supervision information, especially privileged material. We hope that the MOU will make it clear that the CFPB will not share such information with state AGs.
- Focus on debt collection. Mr. Cordray’s remarks addressed debt collection at length, calling on the AGs to form a “national strategic plan” with the CFPB to combat “unconscionable” and “inexcusable” conduct by debt collectors. He specifically mentioned “robo-signing” with regard to debt collection. These comments make it clear that there is a strong impetus behind the CFPB’s desire to supervise debt collectors under the proposed Larger Participant Rule, and also make it clear that the Bureau will be looking at documentation issues with regard to debt collection, as we’ve predicted on this blog.
- New Mortgage-Related Rules Coming. The Director previewed several upcoming mortgage-related rulemaking efforts forthcoming “this year” – including one dealing with monthly mortgage statements, one requiring disclosures on ARMs, and another dealing with force-placed insurance.
- “Zoning in” on tribal payday lenders. Answering a question from Colorado’s Attorney General, Mr. Cordray stated that both the CFPB and the FTC are looking at payday lenders who assert Native American tribal immunity as a defense to state laws.
The overall theme of the Director’s remarks was to underscore the cooperation between the CFPB and state AGs, which is certainly no surprise. What will result from that cooperation remains to be seen, but given the Director’s rhetoric, I won’t be surprised to see it happen sooner rather than later.