Attorney General Ken Paxton today joined a 12-state coalition – led by Indiana and Arkansas – in support of a proposal by the Consumer Financial Protection Bureau (CFPB) to rescind a 2017 CFPB rule and replace it with a new one governing small, short-term loans. The existing rule ignores the states’ traditional role as the lead consumer protection authorities, and it harms consumers’ freedom to make decisions about the types of financial products that best serve them.
In a letter to CFPB Director Kathleen Kraninger, Attorney General Paxton and his counterparts stated that “the proposed rule respects the states’ role in maximizing consumers’ welfare by ensuring both that consumers are protected from illegal practices and that they have access to credit.”
“Texas and other states have designed a variety of regulatory approaches to small-dollar lending that are best-suited to the unique needs of their residents, rather than a one-size-fit-all directive from Washington,” Attorney General Paxton said. “No CFPB rule should intrude on the states’ responsibility to ensure that their residents can obtain credit on fair terms.”
Indiana, Arkansas and Texas are joined in the letter to the CFPB by Alabama, Georgia, Kansas, Louisiana, Oklahoma, South Carolina, South Dakota, Utah and West Virginia.
Last year, Attorney General Paxton led a 14-state brief challenging the constitutionality of the CFPB and its Arbitration Rule, which would have increased the cost of credit for Americans and deprived them of a resource for resolving disputes between banks and consumers. President Trump ultimately signed into law a joint resolution passed by the U.S. Senate and U.S. House that rescinded the rule.
View today’s letter to the CFPB here: https://www.regulations.gov/document?D=CFPB-2019-0006-27970