Tierney Testifies before Congressional Committee on Consumer Credit Protection

 

 

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New York, March 24, 2009 – James E. Tierney, director of the National State Attorneys General Program at Columbia Law School, calls upon the Federal Trade Commission (FTC) to join the Federal Deposit Insurance Corporation, all attorneys general, and many consumer groups in opposing efforts by other federal agencies and the banking industry to preempt state consumer protection authority over banks.

Tierney testifies this morning before the U.S. House of Representatives Subcommittee on Commerce, Trade, and Consumer Protection regarding the roles of state law enforcement officials, including attorneys general, and the FTC in protecting consumers from fraudulent and misleading lending practices.

“State attorneys general saw the need for consumer protection in the area of credit. They got it first. And they got it right,” said Tierney.

“Consumer fraud in the area of credit has spawned an epidemic with millions of victims,” said Tierney, “and the country needs to remove the restrictions on the ability of states to combat that fraud.” The issue of state preemption is again before the U.S. Supreme Court in the case of Cuomo v. Clearinghouse, which will be argued next month.

“A positive federal and state consumer protection partnership would be the most effective way to shield our citizens from fraud. I hope that the FTC will take a lead in bringing that partnership to fruition.”

Tierney’s testimony will contrast anti-predatory lending approaches taken by attorneys general in cases such as those against Household International, Ameriquest, and Countrywide Financial with federal officials’ traditionally anti-regulation attitudes.

“A hands-off regulatory approach by the federal government and a series of narrowly targeted laws led the industry to act as if it could do anything that was not specifically prohibited,” Tierney stated. “This allowed credit products to become more dangerous to consumers.

“Attorneys general and their staffs operate in a bipartisan manner on a multistate basis. Attorneys general and their staffs live in impacted communities. They see the problems sooner, and have a positive record of combating the fraud. It is vital that the FTC join them in their efforts.”

 

Tierney, the former attorney general of Maine, is available to speak with reporters about the power of the attorney general in the economic crisis. Tierney can be reached directly at 207-837-1877 or [email protected].

James E. Tierney is the director of the National State Attorneys General Program at Columbia Law School, where he has also taught as a lecturer-in-law since the fall of 2000. Tierney served as the attorney general of Maine from 1980 until 1990. He is currently a consultant to attorneys general and others.

 

The National State Attorneys General Program at Columbia Law School is a legal research, education and policy center that examines the legal and policy implications of the work of state attorneys general. Collaborating with attorneys general, academics and other members of the legal community, the Program develops and distributes legal information that state prosecutors can use to carry out their civil and criminal roles.

 

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