The Enforcers & the Great Recession

56 Pages Posted: 8 Dec 2014 Last revised: 22 Jun 2015

See all articles by Mark Totten

Mark Totten

Michigan State University College of Law

Date Written: June 2015


No one played a more vital role responding to the worst economic crisis since the Great Depression than a small band of state attorneys general (AGs). Yet this story has never been told nor its implications considered. For more than a decade these AGs brought enforcement actions across the residential mortgage lending industry, reaching the origination, servicing, and securitization processes. From roughly 2000 to 2008, they targeted several of the largest subprime lenders for predatory and discriminatory lending. And they moved in the face of federal inaction — at times, even opposition. With the economic crisis everywhere visible by early 2009, they turned toward abuses in mortgage servicing and securitization. While they often collaborated with their federal counterparts during this time period, these AGs continued to lead and shape the enforcement agenda.

This narrative demonstrates that states are integral to the task of consumer financial protection. Congress was right to empower states in the Dodd-Frank Act of 2010 by scaling back preemption and giving the AGs concurrent enforcement powers. The AGs not only serve as a stopgap when federal regulators fail to act, but they also alter the quality of enforcement in positive ways not replicated by even engaged federal regulators. The marks of AG enforcement include information advantages, agility, a remedial focus, resistance to capture, and entrepreneurialism. Moreover, these events also suggest a new enforcement model in the area of consumer protection that may sometimes prove more efficient than earlier approaches: the multigovernment, multiagency action. And while these observations concern consumer financial protection in the first instance, they also have implications for ongoing conversations about federalism and enforcement.

Keywords: state attorneys general, Great Recession, economic crisis, predatory lending, consumer protection, consumer financial protection, enforcement, Dodd-Frank Act

Suggested Citation

Totten, Mark, The Enforcers & the Great Recession (June 2015). Mark Totten, The Enforcers & the Great Recession, 36 Cardozo L. Rev. 1611, 1611-1666 (2015)., Available at SSRN:

Mark Totten (Contact Author)

Michigan State University College of Law ( email )

318 Law College Building
East Lansing, MI 48824-1300
United States


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