OAKLAND, Calif. — California Attorney General Rob Bonta has joined a coalition of 16 attorneys general in opposing a proposed rule from the Office of the Comptroller of the Currency and the FDIC that would sharply limit federal banking regulators’ authority to supervise banks and enforce consumer protection laws, according to a release from Bonta’s office.
In a comment letter, the attorneys general warned that the proposal would dismantle long-standing supervisory tools used to identify unsafe or risky banking practices before they harm consumers or threaten financial stability. The rule would bar regulators from issuing supervisory warnings about practices that could lead to future harm and restrict oversight of emerging risks tied to new financial products and technologies.
“Proactive and robust supervision of banks is crucial for our nation’s financial health and to protect the millions of Americans who rely on our financial system,” Bonta said in the release, arguing the proposal ignores lessons from the Great Recession and weakens protections at a time of rapid financial innovation.
The coalition said the rule would unwind protections enacted by Congress, abandon a proactive supervisory model, and prevent regulators from examining growing threats that are not yet imminent, including cryptocurrency-related products, private credit markets, and investments tied to artificial intelligence.
The attorneys general also pointed to past supervisory actions that resulted in nearly $250 million in consumer refunds tied to overdraft fees as evidence of the value of active oversight. Joining Bonta on the letter were the attorneys general of New York, Arizona, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and the District of Columbia.