Breaking news from the world of consumer finance regulation

In an unusual announcement issued today by the Consumer Financial Protection Bureau, the powerful new regulator of all things consumer finance has communicated an intent to withhold any rule-making or new regulatory announcements, investigations and administrative action until a Director is formally nominated and confirmed by Congress. Due to the divisiveness of the issues related to the very existence of this new Bureau much less who should run it, prognosticators are expecting the a nomination fight to last months and possibly stretch into late 2012.

In a demonstration of solidarity with the announcement and the Bureau, the 50 State Attorneys General have all signed a document pronouncing their intent to put a stay in place relative to new consumer finance related regulation until such time as the first Bureau Director is finally approved by Congress. And, a Republican Member of the House of Representatives has introduced a bill that would protect (through civil immunity) credit card companies, banks, pay day lenders and even credit unions from civil actions by consumers (whether organized by class or individually) for regulatory transgressions during this interim period when there sort of is, but really isn't, a new regulator in place. And, in yet another demonstration of the power of the automobile lobby, Congress has exempted car dealers from regulation by and under the Dodd-Frank Act, which may well mean that the proverbial "used car salesman" will be the one "outlaw" that will be beyond the control of D.C.'s newest consumer sheriff.

Oh, and April Fools!

Of course the CFPB is not going to wait for Congress to approve a nominated director. The rulemaking is going to start even before the Designated Transfer Date. The State Attorneys General cannot even get together on how to deal with the robo-signing foreclosure-related issues. They won't be agreeing to any stay of investigation or enforcement. And, no, there will be no immunity for the industry. The depth and breadth of the lawsuit related fallout from the mortgage/foreclosure crisis and related financial meltdown has yet to be determined with any certainty. In fact, ironically, the only true statement above in this post is the part about car dealers being exepted from Dodd-Frank. As capable of evading rational explanation as that may be....its actually true.

Enjoy your April. As we get closer to May, the CFPB Designated Transfer Date of July 21 is going to come into focus, and the craziness will begin.