On May 15, 2025, The Consumer Financial Protection Bureau (CFPB) published an interpretive rule to rescind an earlier interpretive rule, “Authority of States to Enforce the Consumer Financial Protection Act,” published in 2022.
The 2022 interpretive rule was included in the list of rules being rescinded or revoked published by the CFPB on May 12, 2025. The May 15, 2025 interpretive rule explains the Bureau’s reasons for rescinding the earlier interpretation.
Section 1042 of the Consumer Financial Protection Act (CFPA) generally authorizes States to ‘‘bring a civil action or other appropriate proceeding to enforce the provisions of this title or regulations issued under this title . . .’’ The ‘‘title’’ referenced is title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, also called the CFPA. State authority under section 1042 is therefore limited to actions to enforce the CFPA.
In the May 26, 2022, interpretive rule, the CFPB interpreted section 1042 to allow States to bring an action whenever ‘‘a covered person or service provider violates any of the Federal consumer financial laws,’’ not just the CFPA. The CFPB believes a more appropriate interpretation of section 1042 is that it permits States, subject to the limitations imposed thereby, to enforce title X of Dodd-Frank (i.e., the CFPA) and the regulations issued pursuant thereto. If Congress had intended the CFPA to permit States to enforce any provision of any Federal consumer financial law, it would have said so explicitly.
Continuing its retrenchment efforts, the Consumer Financial Protection Bureau published three notices of withdrawal of proposed rules in the May 15, 2025 Federal Register:
For more information, email Heather Line.
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