The Consumer Financial Protection Bureau today said it would invoke a “largely unused” authority under the Dodd-Frank Act to directly examine nonbank financial services providers. “Given the rapid growth of consumer offerings by nonbanks, the CFPB is now utilizing a dormant authority to hold nonbanks to the same standards that banks are held to,” said CFPB Director Rohit Chopra. “This authority gives us critical agility to move as quickly as the market, allowing us to conduct examinations of financial companies posing risks to consumers and stop harm before it spreads.”
The bureau today updated a 2013 procedural rule that implements its statutory authority to supervise nonbanks “whose activities the CFPB has reasonable cause to determine pose risks to consumers,” including unfair, deceptive or abusive acts or practices. The updated rule would exempt final decisions and orders from the CFPB director from being considered confidential supervisory information—meaning that they may be publicly released by the bureau. The rule takes effect upon publication in the Federal Register and has a 30-day comment period.
In addition to its authority to examine nonbanks that may pose consumer risks, under Dodd-Frank, the bureau has direct supervisory authority over nonbanks in the mortgage, student loan and payday loan industries, as well as larger participants in other nonbank consumer financial product markets, and the bureau has conducted rulemakings to define larger participants in consumer reporting, debt collection, student loan servicing, remittances and auto loan servicing. The bureau also directly supervises banks and credit unions with more than $10 billion in assets.
