WASHINGTON, D.C. — Stephen Hall, Legal Director and Securities Specialist, issued the following statement on the release of a special report examining the states’ key role in protecting consumers and investors as federal safeguards are stripped away:

“State agencies and attorneys general have long played an important role in protecting Americans from abusive practices by banks, brokers, insurance companies, and other financial firms. Now, the states’ expertise, resources, and commitment to fair dealing in the financial markets are more important than ever to help compensate for the rapidly shrinking federal role.

“The Administration is gutting the federal agencies that oversee the markets, rolling back important rules, and abandoning enforcement actions that hold wrongdoers accountable. At the same time, new threats to investors and consumers are rapidly emerging, from an endless wave of new cryptocurrency investments to an increasing reliance on artificial intelligence in finance. The result is a perfect financial storm that threatens all Americans.

“As we show in our report, the states play an especially vital role in the face of this dangerous trend. They can aggressively exercise the considerable regulatory and enforcement authority they already have, and in some areas, they can do even more to protect investors and consumers. For example, the states can make sure brokers always act in the best interest of their clients; use their broad authority to take action against nonbank financial companies that exploit their customers; and strengthen protections for investors from the sale of certain annuities that can pay insurance agents handsome commissions but saddle their client with products that don’t serve them well financially.

“It’s clear the states face headwinds in protecting consumers and investors, including budgetary limitations, political pressures, industry lobbying, and the threat of preemption.  But the stakes are high for all American investors and consumers.  Lawmakers, public interest advocates, and the public at large should therefore stand by the states and fully support their critical role in this era of federal deregulation.”

The report is available here. The executive summary is available here.

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.