On June 29, the ABA announced that its efforts to spare those in the practice of law from what it says would be unnecessary federal regulation were successful. After much work, the new Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 will have language supported by the ABA which includes an "exclusion for the practice of law."
The bill, which has just emerged from the Conference Committee, provides that the newly created Consumer Financial Protection Bureau "may not exercise any supervisory or enforcement authority with respect to an activity engaged in by an attorney as part of the practice of law under the laws of a State in which the attorney is licensed to practice law."
According to a statement from ABA President Carolyn B. Lamm, the additional federal regulation that would have come from the CFPB was unnecessary. More importantly, it would have impeded such tenants of law practice as attorney-client confidentiality, interfered with the representation of clients with debt problems and interfered with the traditional role of the state in overseeing the legal profession. President Lamm said, "As 'officers of the court,' lawyers are required to adhere to extensive regulations governing all aspects of the practice of law, and those who fail to comply are subject to severe penalties. There is no need for a federal layer of regulatory authority over these lawyers ..."
A press release from the ABA credits this result to the aggressive and significant efforts by the ABA's Governmental Affairs Office and extensive work by the ABA with both House Judiciary Committee Chairman John Conyers and Rep. Maxine Waters. As a result, attorneys need not worry about adjustments to their normal course of practice or to the Rules of Ethics, but can rely on a continuation of the "historic role of state supreme courts' regulatory authority over the practice of law," while remaining confident that consumers are receiving all the protections they are owed.
- ABA President Lamm Statement re: "Exclusion for the Practice of Law" in "Dodd-Frank Act of 2010? (ABANow)
- Elizabeth Warren: Why We Need a Consumer Financial Protection Agency (FindLaw's Common Law)
- Small Businesses Fear Financial Reform Amendment (FindLaw's Free Enterprise Bog)