With The CFPB Hobbled, The Federal Vacuum Has a Consequence

The CFPB has scaled back some enforcement priorities, and the states have noticed. Certain states – including California, New York, Texas, and Connecticut – are particularly active, pursuing UDAP violations, privacy issues, and fee/disclosure challenges.

For banks with a nationwide or multi-state footprint, this is a game-changer. The patchwork of state-level enforcement can be unpredictable, expensive, and politically influenced.

What This Means for Banks and Other Financial Institutions

Layered Investigations

You might face multiple AGs probing the same conduct, each with slightly different theories.

Politically Driven Priorities

Enforcement agendas can shift quickly, sometimes in response to headlines rather than actual risk.

Inconsistent Standards

States interpret statutes differently, and uniform compliance is hard to achieve.

Actionable Steps to Stay Ahead

Map Your Exposure by State

Keep a live inventory of relevant statutes, emerging enforcement trends, and high-risk product lines.

Build a Multistate Response Playbook

Pre-draft templates, assign response teams, and create escalation protocols. Being ready is better than reacting under pressure.

Monitor Public Statements and Enforcement Priorities

Overdraft fees, call frequency, and credit reporting accuracy are areas often flagged before investigations start.

Coordinate Settlements When Possible

Avoid inconsistent obligations or duplicate payments by negotiating a single, comprehensive resolution across states.

Bottom Line

Until and unless the CFPB is restored to its pre-2024 status, State-driven enforcement is here to stay. Banks and other financial institutions that treat it as an operational reality – rather than an occasional headache – will adapt faster, litigate more efficiently, and reduce exposure.