In the months after Mick Mulvaney's November 2017 appointment as acting director of the Consumer Financial Protection Bureau, several states said they would develop similarly functioning divisions.
Though those states were already active in auto regulation, the fledgling divisions have set their sights on dealer operations.
Many car dealers believed that when President Donald Trump appointed a Republican to head the CFPB — Kathy Kraninger was confirmed as the bureau's permanent director in December — "that compliance was going to take a back seat and be left on the shelves," said Randy Henrick, compliance counsel at Mosaic Compliance Services. With less CFPB oversight, "quite a few dealers are being lulled into a false sense of security."
Auto retail operations in states with consumer financial protection divisions are likely to experience an uptick in activity, Henrick said, because auto dealers are low-hanging fruit for regulators. Auto retail remains lucrative, he said, and it's rare to find businesses that are 100 percent compliant.
"I've had one dealer tell me he gets a visit every quarter from the state attorney general representative, and his first question to him is, 'OK, how much of a check do I have to write you for this month?' " Henrick said. "It's gotten to the point now where it's beyond the cost of doing business. I haven't seen a consent decree of less than $100,000 in a while."