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ARTICLE · 26 MAY 2025

CFPB Narrows State Enforcement Powers By Rescinding 2022 Interpretative Rule

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On May 15, the CFPB rescinded its May 2022 interpretive rule that had expanded state enforcement authority under Section 1042 of the Consumer Financial Protection Act (CFPA).

United StatesFinance and Banking
A.J. Dhaliwal
A.J. Dhaliwal
Mehul Madia
Mehul Madia
Beineng Zhang
Beineng Zhang
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On May 15, the CFPB rescinded its May 2022 interpretive rule that had expanded state enforcement authority under Section 1042 of the Consumer Financial Protection Act (CFPA). The Bureau now maintains that the previous guidance misread the statute and improperly extended state authority beyond what Congress intended.

According to the rescission, the CFPB identified three core issues with the 2022 interpretation that gave states unintended additional regulatory powers. Specifically, the CFPB stated that the rule:

  • Expanded the reach of Section 1042. The rule concluded that states could enforce any provision of the CFPA, including Section 1036's UDAAP prohibition. The Bureau now asserts that Section 1042 only permits enforcement actions as specifically authorized within the CFPA and not any conduct touching on consumer protection.

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