In a letter this week, the American Bankers Association raised several concerns about the Consumer Financial Protection Bureau’s plan to create a public registry of nonbank entities that are subject to orders involving consumer protection laws, including the agency’s claim that banks may one day be required to register. Under the proposal, nonbank financial firms would be required to register with the CFPB when they become subject to certain local, state or federal consumer financial protection agency or court orders. Registered nonbanks that are subject to CFPB supervision would also be required to attest to compliance with these orders, signed by a designated individual. The registry would be made available online. The agency said in a press statement that it may consider requiring banks to register and provide information at a later date, but “there is currently greater need to collect this information from nonbanks under its jurisdiction.”
ABA noted in its letter that under the Consumer Financial Protection Act, the CFPB is explicitly prohibited from establishing registration requirements for insured depository institutions. Moreover, there is no need for banks to register as the agency itself acknowledges that it already has that data, and that there are four federal regulators that regularly publish consumer protection orders, the association said.
Another concern for ABA was that the registry could extend to bank holding companies and other nonbank affiliates of banks. “Bank holding companies are known to the bureau and the banking regulators…. For bank holding companies and other nonbanks affiliated with banks, the Federal Reserve and the bureau can detect risks to consumers through their supervisory authorities, making a registration requirement superfluous.,” the association said. ABA also said CFPB must clarify in the final text of the regulation that nonbank affiliates of banks are exempt from the attestation and written statement requirements.
