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Attorney General Josh Stein Fights to Keep Consumer Protections in Place

For Immediate Release:
Thursday, January 23, 2020

(RALEIGH) Attorney General Josh Stein today took action to ensure that states can continue to use powerful tools under federal law to protect consumers from fraud and abusive consumer practices. Attorney General Stein and 23 other attorneys general filed an amicus brief in Seila Law, LLC v. Consumer Financial Protection Bureau, arguing that the U.S. Supreme Court should preserve the Consumer Financial Protection Bureau (CFPB) and other significant consumer protections provided by Title X under the Dodd-Frank Act.

“As Attorney General, protecting consumers is one of my office’s highest priorities,” said Attorney General Josh Stein. “The Consumer Financial Protection Bureau’s work, along with these provisions under federal law, are critical to North Carolinians’ wellbeing. I urge the Supreme Court to keep these protections in place.”

In 2017, the CFPB commenced an investigation into the California law firm Seila Law for its debt-relief practices. Seila Law sought to block the investigation entirely, arguing that the CFPB is unconstitutionally structured because the CFPB director may only be terminated by the president “for inefficiency, neglect of duty, or malfeasance in office,” a provision that it argues impinges on executive power and violates the Constitution’s separation of powers clause. After its argument was rejected by the district and appeals court, Seila Law has now appealed to the U.S. Supreme Court, again arguing that the CFPB is unconstitutional and that the entirety of Title X of the Dodd-Frank Act — which includes the provisions that created the CFPB, as well as powerful, new tools for state consumer protection enforcement — must be struck down.

Under the Trump administration, the CFPB has changed course from the position of the Obama administration and now agrees with Seila Law that the for-cause removal provision violates the separation of powers clause, although the agency argues that the rest of Title X can survive even if the for-cause removal provision is invalid.

In the amicus brief filed today, the coalition argues that the CFPB’s structure is constitutional and that even if the for-cause removal provision is invalid, the CFPB and the rest of Title X should survive. The brief highlights the many ways that the states have worked cooperatively with the CFPB to root out fraud and abusive consumer practices in the market, including joint enforcement actions and information sharing. The brief also highlights the various provisions of Title X that are unrelated to the CFPB, but nonetheless give the states powerful tools to combat fraud and abusive practices.

Attorney General Stein is joined in filing today’s brief by the Attorneys General of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia.

A copy of the brief is available here.

Laura Brewer (919) 716-6484


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