WASHINGTON (Legal Newsline)-A group of 13 state attorneys general are absent from a sign-on letter sent last week to congressional leaders urging them not to preempt state consumer protection statutes.

It is noteworthy that the attorneys general did not sign the Nov. 4 letter since all but two of them opposed federal preemption of consumer protection laws in an amicus brief filed in a U.S. Supreme Court case last term, Cuomo v. The Clearing House Association.

The AGs' letter, organized by Republican Rob McKenna and Democrat Tom Miller of Iowa, urges Congress not to erode the states' role in consumer protection amid the proposed creation of a new federal Consumer Financial Protection Agency, which would, among other things, regulate mortgages and credit cards.

In their letter, the attorneys general said Congress should not preempt state banking and mortgage foreclosure laws if lawmakers create the new agency, which was called for by President Barack Obama.

"Rather than limiting the states' role in consumer financial protection, as some have advocated," the letter said, "we believe Congress should encourage an active and effective partnership between the states and federal financial regulatory agencies to the ultimate benefit of all consumers."

The states' chief legal officers who signed the letter say they should be able to enforce the proposed federal agency's regulations, allowing for a joint approach to protecting consumers. They also said they want to be able to enforce consumer protection laws for state- and federally-chartered financial institutions.

"Weakened consumer protections and limited enforcement authority already have damaged many consumers and the economy in general," the letter said. "Early state action can prevent a local problem from becoming a national one."

Of the 13 attorneys general, Democrats not signing onto the letter were: Beau Biden of Delaware, Jack Conway of Kentucky, Thurbert Baker of Georgia, Buddy Caldwell of Louisiana, Andrew Cuomo of New York and Drew Edmondson of Oklahoma.

Republicans not signing on the letter: Jon Bruning, president of the National Association of Attorneys General, which circulated the letter; and Alabama's Troy King, Indiana's Greg Zoeller, Pennsylvania's Tom Corbett, South Carolina's Henry McMaster, South Dakota's Marty Jackley and Wisconsin's J.B. Van Hollen.

Earlier this year, the U.S. Supreme Court ruled in a closely watched federal preemption case that state attorneys general have the authority to sue national banks.

In the case of Cuomo v. The Clearing House Association, all of the states' attorneys general urged the justices to overturn a 2nd U.S. Circuit Court of Appeals ruling that the Office of the Comptroller of the Currency have sole responsibility over banking investigations.

"The position of the Office of the Comptroller of the Currency pushes the boundaries of preemption to new limits, thereby undermining the role that States play in our federal system," the AGs' brief said. "Unlike the state attorneys general, the OCC has no experience in enforcing state public protection laws, has a minimal track record in consumer protection, and has no accountability to the citizens of any state."

Siding with the AGs, the high court ruled that national banks are subject to some state laws under the National Banking Act. Because of that, the court said that attorneys general may seek a court's help to enforce those laws.

Attorneys general Zoeller and Jackley were not in office when the amicus brief was filed; their predecessors signed onto the document.

Legislation calling for the creation of a national consumer protection agency was introduced by U.S. Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, in July. The bill is H.R. 3126. The House Financial Services Committee voted 39-29 on Oct. 22 to pass the bill.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.