A bipartisan commission established to assess financial protections for Marylanders recommended Friday that state officials step in and act on behalf of residents when the federal government fails to do so because of recently gutted consumer regulations.
In an interim report, the Maryland Financial Consumer Protection Commission, found that Congress and Trump administration have indeed rolled back consumer financial protections in the last year and recommended that the General Assembly pass legislation to fill that void.
“Ten years ago, hundreds of thousands of Marylanders lost their jobs, lost their homes and lost their retirement savings because of mistakes, greed and other sins … on Wall Street,” said Sen. James C. Rosapepe, a Prince George’s County Democrat and commission member. “What we’re saying today … is to turn the traffic lights back on on Wall Street, put the guardrails back up on Wall Street, so these dangerous financial vehicles don’t crash and bring down our economy.”
Rosapepe spoke about the release of the interim report at an Annapolis news conference Friday attended by a handful of Maryland legislators on the commission, Senate President Thomas V. Mike Miller Jr. (D) and House Speaker Michael E. Busch (D), and commission Chairman Gary Gensler, a former Wall Street banker and financial official in the Clinton and Obama administrations.
Rosapepe and Del. C. William Frick, the Montgomery County Democrat who is House majority leader and a commission member, will be the lead sponsors of legislation in their respective houses to strengthen consumer protections and backfill where federal regulators are stepping back.
The commission made four general recommendations with specifics within each:
- Ensure that Maryland’s congressional delegation advocates for financial consumer protections and oppose elimination of those protections through legislation or regulation.
- “Vigorous enforcement by and funding of” the Maryland Attorney General’s Consumer Protection Division and the Maryland Office of the Commissioner of Financial Regulation.
Under provisions in the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in 2010 after the nation’s 2008 economic crisis, states are able to bring enforcement actions for violating the federal law’s prohibition of unfair, deceptive, or abusive acts or practices.
- Fill the gaps where the federal government has eliminated or pulled back on protections.
Included among recommendations in this area are: extend the so-called “fiduciary duty” of putting the customer first to all financial professionals advising customers; establish a uniform standard for arbitration; expand the definition of “mortgage loan originator” to include retailers of manufactured homes; and eliminate loopholes in state law governing payday and consumer lending.
- Address developments that have arisen since the passage of Dodd-Frank.
Among recommendations in this area are: Establish a student loan bill of rights and create a student loan ombudsman; consider licensing and supervising servicers of student loans; adopt protections for investors and merchants using so-called “cryptocurrencies,” such as Bitcoin; and require credit reporting agencies such as Equifax, to promptly alert the public of an information and security breach, as well as expand the ability for all consumers to request free security freezes on their credit reports.
The commission, established in last year’s session of the General Assembly, is to issue its final report at the end of this year.