Two recent pieces, a Stateline report and an article in The Journal of Federal Agency Action co-authored by Troutman Pepper Locke partner Ashley Taylor Jr., arrive at the same conclusion from different directions: the center of gravity in consumer financial regulation has shifted from Washington to the states. For the accounts receivable management industry, that shift is no longer theoretical.
The Stateline piece documents how state attorneys general of both parties have expanded consumer protection work since the dismantling of the Consumer Financial Protection Bureau. The agency has dropped dozens of investigations, cut staff, and made it harder for consumers to file complaints. Connecticut AG William Tong, who leads the National Association of Attorneys General, described states as picking up the pieces. The bipartisan nature of the trend is striking. Republican and Democratic AGs jointly pursued the Live Nation antitrust trial to a jury verdict after the federal government settled, and 46 states recently extracted a $45 million settlement from Block Inc. over CashApp fraud protections.
The takeaway for collectors, debt buyers, and furnishers: enforcement has not decreased, it has decentralized. Taylor, who represents companies facing state AG investigations, notes that businesses now confront highly coordinated multistate actions and a patchwork of differing, sometimes contradictory, state rules on pricing transparency, fees, and algorithmic practices. States have hired former CFPB staff and expanded consumer protection budgets.
The journal article, co-authored by Taylor with Marquette professor Paul Nolette and Maine AG Aaron Frey, adds a legal dimension. The Supreme Court’s Loper Bright decision ending Chevron deference will, the authors argue, make state AGs the dominant players in the next era of regulatory litigation. Without deference to federal agency interpretations, challenges to federal rules become easier to win, and state deference doctrines, which vary widely from Pennsylvania’s strong statutory deference to Delaware’s de novo review, become newly important. The authors predict AGs will lean harder on statutory text in challenging federal action, counsel their own agencies to build stronger rulemaking records, and choose litigation forums strategically based on each state’s deference regime.
For an industry accustomed to tracking a single federal regulator, the message from both pieces is the same. Compliance programs built around the CFPB and Regulation F now need 50-state awareness, because the next enforcement action is more likely to come from a state capital than from Washington.
