CONSUMER FINANCE CEOs SEEK ROGAINE

As we predicted here on December 1, significant increase in States Attorneys General power may well be the top consumer finance regulatory enforcement story for the coming year. In a move further evincing that efficacy is her mission as opposed to consolidation of power, Elizabeth Warren is bringing the State AGs into the CFPB fold. Unless appearances are seriously deceiving, Ms. Warren is not merely giving speeches or keeping the AGs updated. According to Bloomberg Businessweek, Ms. Warren is actively reaching out to the AGs, hosting weekly calls and inviting them to D.C. for closed door meetings. Just this week, she traveled to Fort Lauderdale, Florida to attend the NAAG Winter Meeting. Importantly, this was a meeting limited to AGs and their staff, which is at least one indicator of serious strategy discussions. Good timing, especially considering the nationwide foreclosure issues and implementation of Dodd-Frank and its Consumer Financial Protection Bureau that were almost certainly headlining the agenda.

Any real cooperation or alliance between CFPB regulators and AGs would be the harbinger of a new day in consumer finance regulation and promises to increase the rate of many CEOs already receding hairlines. Warren has explicitly said that the AGs "are natural partners for the consumer agency," and she has acknowledged that "regulators in Washington . . . used to prevent the [AGs] form protecting consumers." Ms. Warren's reference is most pointedly directed to the Office of the Comptroller of Currency, which historically has been the keeper of "preemption," a legal doctrine that protected many lending institutions from State-level regulatory enforcement actions. The balance of power has changed with Dodd-Frank. It has curbed the OCCs ability to block consumer protection actions brought by State AGs. And, there is no surprise in the fact that the closer the AGs cuddle up to Warren and the other CFPB leaders such as Peggy Twohig and Steve Antonakes, the better positioned they will be. To this end, North Carolina's AG, and current NAAG President, Roy Cooper recently observed that a key goal in establishing a new and closer relationship with the feds is to influence the preemption doctrine. Anyone that knows General Cooper or is familiar with his office's work in NC knows all too well that he is not hoping to see preemption strengthened or expanded. And, Cooper has already fromed a group of State AGs to work with Warren on policy decisions related to mortages and credit cards.

So, let's review: Dodd-Frank already gives State AGs the authority to enforce its provisions and related regulations in courts. The CFPB is being formed under the hand of a consumer advocate that is serious enough about protecting consumers that she appears willing to abandon age old turf-protection practices and policies. Talk of a preemption rollback is picking up steam just as State AGs and the CFPB appear on the verge of a real partnership. And, sales of Rogaine on Wall Street are up sharply. Are these stories related? You make the call.