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62 Harv. J. on Legis. 1 (2024-2025)

handle is hein.journals/hjl62 and id is 1 raw text is: ARTICLE STATE ENFORCEMENT AS A FEDERAL LEGISLATIVE TOOL ROHIT CHOPRA* & SETH FROTMANT ABSTRACT Enacted in the wake of the 2008financial crisis, the Consumer Financial Protection Act (CFPA) which was Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank') made sweeping changes to thefederalframeworkfor consumer financial protection. This law created the Consumer Financial Protection Bureau (CFPB) and included a broad range ofnew protectionsfor consumers, as well as a wide variety of tools for law enforcement and regulators to enforce the Act's provisions.' Among the most important features of the CFPA is its embrace of cooperative federalism. Specifically, section 1042 of the CFPA empowers states to enforce federal consumer financial protections against entities covered by the CFPA,2 and section 1044 safeguards state efforts to build onfederalprotections.3 This article examines the use of the CFPA by state law enforcement agencies. Our analysis finds that allfifty states have collectively participated in aboutfifty total actions using this authority across the country, regardless of the political party of state officials.4 We also find that this cooperative federalism model and the use of the CFPA by states has been successful in ensuring robust protections for consumers, complementing in several significant ways federal enforcement of thefederal consumerfinancialprotection laws, as well asprivate enforcement by individual citizens ofmany ofthose laws. Given this success, state law enforcement officials may wish to utilize this tool even more in the coming years. In turn, the article highlights thepower ofcooperativefederalism to ensure the comprehensive enforcement offederal law, a lesson that lawmakers could carry into more policy areas. I. IN TR O D U CTION ..................................................................................... . . 2 A. Overview of Section 1042 of the Consumer Financial Protection Act... 5 II. THE CFPA FRAMEWORK FOR DUAL ENFORCEMENT OF FEDERAL CONSUM ER FINANCIAL LAW .......................................................................... 7 * Director, Consumer Financial Protection Bureau t General Counsel, Consumer Financial Protection Bureau. The authors wish to acknowledge the significant assistance they received in the drafting process from Ben Kaufman and Brad Lipton, Nick Kime, Colin Wilson, Veronica Spicer, and Kristin Bateman at the CFPB. 1 See infra Part II Section C. 2 See Dodd-Frank Wall Street Reform and Consumer Protection Act § 1042, 12 U.S.C. § 5552. 3See 12 U.S.C. § 25b. 4 See infra Part III Section A. For reference, the CFPB itself filed about 350 enforcement actions in total from its founding in 2011 through January 2024. See CFPB, Enforcement by the Numbers, https://www.consumerfinance.gov/enforcement/enforcement-by-the-numbers/ [https://perma.cc/2RSE-VNGY].