One of the myriad responsibilities assigned to the Bureau of Consumer Financial Protection (the “Bureau”) by the Dodd-Frank Act concerns consumer complaints. Sp0ecifically, the Bureau must record such complaints and route them to the appropriate regulator pursuant to Section 1034 of Dodd-Frank (12 USC 5534). According to recent press reports, the Bureau is working hard to improve its on-line and phone-based intake systems to assure proper routing and timely resolution of complaints. Those same news reports suggest the Bureau is working with certain (unnamed) state Attorneys General – who themselves are empowered by Dodd-Frank to enforce certain state and federal consumer protections – on the breadth of information collected from complainants.
The Bureau’s outreach to state AGs also may provide the catalyst to involve those state officials more in state-level financial services enforcement actions. To the extent state AGs have considered financial issues confronting their constituents during the past two years, they appear to be concentrating on mortgage matters, which makes sense given the mortgage market collapse and continued economic doldrums. Depending on what types of consumer complaints or information the Bureau routes to the states, however, the AGs may find themselves involved more in financial transactions enforcement going forward as well.
The National Association of Attorneys General (NAAG) prepared an overview of Dodd-Frank in November 2010 (http://www.naag.org/assets/files/pdf/pubs/wall-street-reform-UB.pdf). In addition to outlining the federal and state laws their members can enforce under Dodd-Frank, NAAG opined that Dodd-Frank “suggests that Attorneys General will be able to step into the shoes of the Bureau in enforcing Federal consumer financial protection law, with the same investigatory tools and remedies that are available to the Bureau.” Those “tools and remedies,” according to NAAG, include “the power to compel documents and testimony by issuing a subpoena.” Whether individual state AGs agree with NAAG’s interpretation of Dodd-Frank with respect to enforcement powers, and how far budget-conscious AGs can stretch their staffs to accommodate Dodd-Frank issues, remains to be seen. Customer-facing vendors of all types should be aware, however, that the Bureau’s efforts to fix its Internet and telephone portals for consumer-complainants already implicate state AGs, and that some state AGs may use a variety of enforcement tools to fulfill their role under Dodd-Frank.