State AG Consumer Finance Enforcement Trends

This article is a detailed report on the evolving role of state attorneys general (AGs) in enforcing consumer financial services regulations. It outlines how state AGs are increasingly asserting their authority in response to reduced federal oversight, particularly from the Consumer Financial Protection Bureau. The report describes various areas of focus for state AGs, including elder abuse, social engineering fraud, and the scrutiny of artificial intelligence in lending practices. It also discusses the recharacterization of noncredit products as loans, highlighting recent legal actions against companies like MoneyLion. The article explains the typical process of state AG investigations, collaboration with state financial regulators, and the implications of these enforcement actions for financial service providers. Furthermore, it provides recommendations for companies to mitigate enforcement risks by enhancing customer service, conducting compliance audits, and monitoring regulatory developments.