ABA President Lamm Statement re: “Exclusion for the Practice of Law” in “Dodd-Frank Act of 2010″
The _ and its nearly 400,000 members—indeed, all practicing lawyers in the United States—are gratified that the House and Senate conferees on the financial markets reform legislation have recognized the importance of maintaining the historic role of state supreme courts’ regulatory authority over the practice of law.
Practicing lawyers are regulated under strict codes of professional conduct that are enforced at the state level, usually by state bar associations that exercise disciplinary authority delegated to them by state supreme courts. 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, as was first proposed in this legislation, and the ABA, along with state and local bars and our concerned members, has been diligent in engaging and assisting Congress on this subject. Our efforts have paid off.
The bill approved by the Conference Committee provides that the new 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.”
The ABA is profoundly grateful to House Judiciary Committee Chairman John Conyers and Rep. Maxine Waters, who strongly advocated for respecting the interests of the state courts and the practicing lawyers licensed by those courts, while at the same time ensuring full protection for consumer interests. This was accomplished by tying the practice-of-law exclusion to the existence of an attorney-client relationship with the consumer client. Senate Banking Committee Chairman Chris Dodd and House Financial Services Chairman Barney Frank ultimately agreed with this perspective, we appreciate their sensitivity to retaining the traditional supervisory role of the states in regulating lawyers.