Ind. AG a Dodd-Frank 'skeptic'
WASHINGTON (Legal Newsline) - Indiana Attorney General Greg Zoeller isn't a huge fan of the regulatory agency created by the Dodd-Frank financial reform package.
That's exactly why he's going to play a large part in it.
North Carolina's Roy Cooper, the current president of the National Association of Attorneys General, recently chose Zoeller to co-chair NAAG's Consumer Protection Committee. One of his duties will be to evaluate how the Dodd-Frank law might change the consumer protection efforts of state attorneys general.
Zoeller said several times Wednesday that he is skeptical about how positive an impact the legislation will have. Some worry about the consumer protection power it grants attorneys general when they are litigating against financial institutions.
"It's important to have balance, when you view attorneys general across the country," Cooper said after speaking at the U.S. Chamber Institute for Legal Reform Summit.
"Making sure you have all the points of view within an organization is important."
Zoeller's point of view is that the law, which created a Bureau of Consumer Financial Protection with which attorneys general can coordinate, has both good and bad aspects.
Good, he says, is the certainty it will create.
"National banks and their subsidiaries will be covered under state consumer protection laws," he said. "My thought that I will share is it's something that should not be as fearful, because banks will now be covered under the same regulations enforced in the states every day."
Some have claimed national banks will have difficulty operating under the rules of 50 different jurisdictions -- a so-called "patchwork" of regulation.
"You can look at each of the 50 state patches and, with a good lawyer, figure out what's required and look at case law that will spell out the statutes in different states and how they should be interpreted," Zoeller said.
Zoeller's greatest fear about the bill? The uncertainty, or as he put it, "the fear of the unknown."
"The provisions to create the new bureau are yet to be established and new rules have yet to be promulgated," he said.
Zoeller also said his office is being stretched thin with a 19-percent increase in caseload and a 15-percent cut in his budget. He said the federal government may be forgetting that costs may be getting passed on to states.
"The shrinking footprint of state governments is going to require more collaboration among the states," he said.
Some attorneys general seem ready for that. The bill received public support from AGs like Illinois' Lisa Madigan, Iowa's Tom Miller, Massachusetts' Martha Coakley and Ohio's Richard Cordray.
"Irresponsible lending and lax oversight helped cause our financial crisis," Miller said. "This new law will help protect Americans and help safeguard our economy."
Another worry from the business community centers on attorneys general hiring private lawyers on contingency fees. Zoeller and Cooper said they don't engage in that practice.
Others have, and some -- like Mississippi's Jim Hood and West Virginia's Darrell McGraw -- have received criticism for hiring campaign contributors.
Cooper was asked if a rule could be drafted to prevent attorneys general from hiring campaign contributors to pursue lawsuits allowed by the Dodd-Frank bill.
He replied that there is no way.
"States are independently sovereign," he said.
Cooper added that even though the bureau can become active in eight months, that time frame is unrealistic.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.