[co-author: Stephanie Kozol]*

A new Connecticut law expands the authority of the state’s attorney general to enforce certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act).[1]

Congress passed the Act in the wake of the 2008 financial crisis. Among other things, the Act restricts banks’ ability to trade with their own funds (i.e., the Volcker Rule), increases government monitoring of systemic financial risks, and stiffens regulation of certain financial products. The Act empowers state attorneys general to enforce several aspects of the law.

For instance, state attorneys general may enforce the Act’s generic ban on unfair, deceptive, or abusive conduct; certain rules of the Consumer Financial Protection Bureau; and mortgage provisions regarding prepayment penalties, prompt crediting of payments, and payment amount requests.[2] However, the Act does not mandate that state attorneys general undertake such enforcement. Attorneys general still largely rely on state law to authorize their enforcement authority, which is why Connecticut’s recent Senate Bill No. 121 is important.

Connecticut law already empowered the state attorney general to file civil actions to enforce the Act. But previously, the attorney general’s independent authority largely stopped there. Subpoenaing necessary documents, testimony, and responses to written interrogatories required, at least in part, conferring with the state’s Department of Banking. Now, under Senate Bill No. 121, Connecticut’s attorney general will have the ability, under certain circumstances, to issue such subpoenas independent of the Department of Banking. This new license includes subpoena power over “out-of-state bank[s].”[3]

Why It Matters

Many state attorneys general already possess independent subpoena power as a tool to enforce the Act. Senate Bill No. 121 adds Connecticut’s attorney general to the list. The new law is a significant change for a state known for its banking sector. We will be watching to see how Connecticut’s attorney general implements his new authority and how that implementation will influence national banking trends.

[1] See Ct. Pub. Act No. 24-75.

[2] https://www.nclc.org/resources/the-role-of-the-states-under-the-dodd-frank-wall-street-reform-and-consumer-protection-act-of-2010/.

[3] Ct. Pub. Act No. 24-75(a)(9).

*Senior Government Relations Manager