Hudson Cook partner Patty Covington helped the industry wrap up what’s been a busy week on the federal regulatory front, including three key positions being filled at the Federal Trade Commission and President Trump nominating Jonathan McKernan to be the permanent director of the Consumer Financial Protection Bureau.

Covington acknowledged in a message to Cherokee Media Group that the size of the agency that McKernan may lead likely will be diminished. But that doesn’t necessarily mean auto finance companies and other providers in financial services have a lighter compliance load.

“Given the appointment (and likely confirmation) of Jonathan McKernan, the CFPB will continue its work, albeit at a less intense pace and with a reasonable approach,” Covington said. “McKernan is very familiar with consumer finance and understands the importance of rational consumer protection and financial institution’s need for stability and predictability of legal and regulatory requirements.

“Financial institutions generally want to follow the law, but they need to know the durable rules of the road. If financial institutions stop and think about it for a moment, they’ll realize they want rational leadership at the CFPB for a fair and properly working marketplace,” she continued.

So, where might things get more complex?

“Additionally, the compliance picture from a risk detection perspective just got more complicated for financial institutions,” Covington said. “They have always had to comply with federal and state law. Financial institutions, however, have largely been focused on federal law. Now that states will become more active, detection risk for state law violations will increase. So, financial institutions really need to hone up on state law requirements.”

State attorneys general already are keeping watch over what’s happening in Washington, D.C.

In fact, 14 of them filed a lawsuit challenging what they believe is the unlawful delegation of executive power to Elon Musk. The lawsuit argues that Trump has violated the Appointments Clause of the Constitution by creating a new federal department without Congressional approval and by granting Musk sweeping powers over the entire federal government without seeking the advice and consent of the Senate.

“Donald Trump seems to think a narrow electoral victory makes him into a king. He could not be more wrong,” Minnesota attorney general Keith Ellison said in a news release. “It is unacceptable and unconstitutional for Trump to create a new federal agency without Congressional approval. Worse still, Trump installed Elon Musk at the head of that agency without vetting and Senate confirmation, and Musk has proceeded to use that unconstitutional appointment to try to cut the federal government to the bone. Today, I’m filing a lawsuit to shut this illegal power grab down.”

Along with Minnesota, the other state AGs involved in the lawsuit are Arizona, California, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, New Mexico, Nevada, Oregon, Rhode Island, Vermont and Washington.