In Episode 2 of Season 5, as the new administration pursues actions that will fundamentally reshape US government, former Arkansas AG, now Cozen O’Connor State AG Group Co-Chair, Dustin McDaniel and team members Chris Allen and Grace Garver discuss how state AGs will step up and the tools they have to fill the regulatory void.
(00:02): Chris Allen introduces today’s speakers: himself, Dustin McDaniel and Grace Garver, and sets the scene for today’s episode about the changes that are resulting from the Trump administration’s reshaping of the federal government, including the freezing of enforcement activity by the CFPB, the firing of Democratic commissioners at the FTC and RIFs at other agencies. He turns to Dustin to describe his former role as Arkansas AG and his relationship with his federal regulatory counterparts.
(03:42) Dustin talks about how during his time as AG, states worked together without great regard for political party affiliations, but now things are very different now, with the Republican AGs in lockstep in defending the president’s policies, and the Democratic AGs in opposing them.
(06:35) Chris reflects on the mortgage servicer settlements of 2012 when almost all the AGs worked together in tandem with the USDOJ and HUD and the changes that have occurred since the CFPB was established.
(08:28) Dustin notes that antitrust is still a dominant theme among state AGS, but that what was once seen as federal presumption has now been redefined and characterized by whichever party is in the minority as federal overreach. He goes on to talk about how state AGs stepped up to address the mortgage fraud crisis in 2008, and before that in 1998 to change the way tobacco is sold and marketed in the US. They also joined forces to pursue Microsoft for its antitrust violations and take action against Google for monopolistic abuses. Dustin recalls the origins of the CFPB as a “new cop” watching over financial transactions and institutions and observes that even though its workforce has been stood down, the act that created it is till in force but now, instead of one cohesive enforcement authority, you effectively have 56 different and unpredictable authorities.
(13:40) Grace weighs in with a timeline of activity at the CFPB since Trump’s inauguration: its headquarters has closed and many of the cases it was litigating against major banks have been dropped. Democratic state AGs have stepped into that enforcement vacuum, challenging efforts to weaken the agency and fire its staff.
(15:33) Dustin reiterates that prior to Hart-Scott-Rodino, state AGs had concurrent antitrust authority, but only had very small staffs and did not work together. Now in the face of the Trump administration’s reshaping of government, the role of state AGs is evolving and they are becoming one of the most significant strategic players.
(20:16) Chris asks Grace to talk about the role played by NAAG, RAGA and DAGA as coordinators of state AG action.
(20:52) Grace explains that these associations help facilitate conversations between AGs and create a forum for settlement negotiation.
(21:49) Chris asks what the takeaways are for clients trying to navigate this space.
(22:19) Dustin sums it up with one word: engagement. He advocates for getting to know AGs on the front end, before litigation has been launched, and he and Grace emphasize the importance of representation at regular meetings of NAAG, AGA, RAGA and DAGA.
To listen to the full podcast, click here. To listen to a particular section, open the recording and use the time stamps provided above to navigate to the desired part.