In four comment letters submitted today, the American Bankers Association urged the Consumer Financial Protection Bureau to maintain robust supervision of nonbanks in the markets for automobile lending, consumer reporting, third-party debt collection and international remittance transfers.
The Dodd-Frank Act gives the CFPB supervisory authority over all nondepository institutions that offer or provide to consumers mortgage or foreclosure relief services, private education loans or payday loans. In addition, Congress gave the CFPB supervisory authority over “larger participant[s]” of other markets when the bureau issues a rule to define the larger participants in that market. Between 2012 and 2015, the CFPB issued four rules to define the “larger participants” in the markets for auto loans, consumer reporting, third-party debt collection, and international remittances. In recently issued advance notices of proposed rulemaking, the CFPB suggested it would raise the threshold for nonbanks to qualify as “larger participants” in the four markets and scale back the agency’s supervision of nonbanks in those markets.
ABA cautioned the CFPB that materially scaling back the agency’s supervision of larger participants in these markets would be a mistake. “Supervision encourages entities to expend the resources to develop the practices, procedures, training and other components of an effective compliance management system that promotes the entity’s compliance with consumer protection laws,” ABA said. “Without supervision, nonbanks may operate without the consumer protections that banks are required to uphold.”
Comment letters:
- Letter to the CFPB on Defining Larger Participants of the International Money Transfer Market
- Letter to the CFPB on Defining Larger Participants of the Consumer Reporting Market
- Letter to the CFPB on Defining Larger Participants of the Auto Financing Market
- Letter to the CFPB on Defining Larger Participants of the Consumer Debt Collection Market
