States Wield New Weapon Against Banks — Courtesy of Dodd-Frank

From: American Banker

Benjamin P. Saul and W. Kyle Tayman

Over the past 16 months, a growing number of states have taken action against banks and consumer finance companies for violations of Dodd-Frank’s prohibition of unfair, deceptive or abusive acts or practices. The attorneys general for New Mexico, Illinois, Mississippi, Connecticut and Florida, as well as New York’s Department of Financial Services, have used their Dodd-Frank authority to assert civil claims alleging violations of UDAAP and other federal regulations in at least 12 different actions.

The states’ targets included national banks, an auto lender, student lenders, a payday lender and a credit monitoring agency. It is unclear, however, if the wave of state actions signals a burgeoning state scrutiny of consumer finance companies or if state enforcers will only employ this new approach on occasion.

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