The American Bankers Association, joined by the Consumer Bankers Association, expressed support for the Consumer Financial Protection Bureau’s proposal to maintain the confidentiality of decisions to exercise the agency’s supervisory authority over a nonbank entity that may pose risks to consumers in providing consumer financial products or services.
The Dodd-Frank Act and the CFPB’s 2013 implementing regulation give the CFPB authority to move quickly to supervise, for a period of two years, a nonbank that presents an immediate risk of harm to consumers. In 2022, the CFPB established a process permitting the public release of all or part of any decision or order subjecting a nonbank to the agency’s supervision. At the time, the associations opposed the public release of these orders because it set a harmful precedent by disclosing confidential supervisory information. The associations noted that the public release does not provide helpful guidance to regulated entities because decisions will be based on inchoate risk assessments resting on incomplete and potentially inaccurate information, not verified illegal conduct based on a full record and analysis.
In the letter sent Thursday, the associations expressed support for the CFPB’s proposal to reverse course and maintain the confidentiality of these decisions. “Confidentiality often encourages candid communication and cooperation between bank management, the board, and the supervisory authority,” the associations wrote. “We question whether the public release of these orders provides helpful guidance to regulated entities about the bureau’s interpretation of the law and regulations it enforces.”
