The relief provided to lenders by the rollback of the Dodd-Frank Act is quickly “being dismantled” by stricter state regulation, said Patty Covington, an attorney at Hudson Cook LLP.
State laws are typically more difficult to manage because “there are more of them,” Covington said, adding that 11 new attorneys general will be elected come November.
What’s more alarming, she pointed out, is the number of conservative states — namely, Georgia, South Carolina, and Virginia — creating their own consumer financial protection divisions to fill the void or step up enforcement.
“The fact that conservative states are putting attention on regulation is indicative of where the attorney generals are going,” Covington said. Despite the possibilities for states to ramp up regulation, the Dodd-Frank rollback has been noted as a “good, common-sense bill,” and it’s “a first step in right-sizing regulation,” said Richard Hunt, president and chief executive of the Consumer Bankers Association.
“While the legislation makes some meaningful reforms, there is still more to be done,” he added.