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ARTICLE
STATE ENFORCEMENT AS A FEDERAL LEGISLATIVE TOOL
ROHIT CHOPRA* & SETH FROTMANT
ABSTRACT
Enacted in the wake ofthe 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 the federal framework for consumer financial protection. This law
created the Consumer Financial Protection Bureau (CFPB) and included a
broad range of new protections for 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 on federal protections.3
This article examines the use of the CFPA by state law enforcement
agencies. Our analysis finds that all fifty states have collectively participated in
about fifty 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 the federal consumer financial protection laws, as well as private
enforcement by individual citizens of many of those 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 the power of cooperative federalism to ensure
the comprehensive enforcement of federal law, a lesson that lawmakers could
carry into more policy areas.
I. IN TR O D U CTIO N ..................................................................................... . . 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.
i 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/
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