Last March, CFPB Director, Richard Cordray, called on all 50 states to sign a memorandum of understanding (MOU) to assuage industry concerns regarding the protection of confidential information shared among states and the bureau. To date, only 12 states have answered the call. Oklahoma Attorney General Scott Pruitt explains that some attorney generals are declining to sign the MOU over legal objections to Dodd-Frank and the recess appointment of Cordray. “There are misgivings I have about the authority and scope and power of the CFPB and the power granted to the director. Frankly, until some of those issues are fleshed out, it is very premature for a state to enter into an MoU.” Indeed, it has been reported that some states, including Oklahoma, South Carolina, Kansas and Michigan, are preparing a lawsuit to challenge the constitutionality of Dodd-Frank and the powers it grants to the bureau and its director. South Carolina Attorney General Alan Wilson warned that the lawsuit would be filled later this month.
CFPB spokeswoman Moira Vahey attempted to dismiss these concerns stating that the CFPB is “pleased that we have a dozen agreements and additional agreements in the works. However, this is a state-by- state process and will take time.” The 12 states that have signed the MOU are: New Hampshire, New Mexico, Montana, New York, Vermont, North Carolina, Hawaii, Iowa, Mississippi, Nevada, Wyoming and North Dakota. The District of Columbia has also signed the MOU.