CFPB modifies nonbank supervision procedural rule

Changes to clarify what will be disclosed to the public when the Consumer Financial Protection Bureau (CFPB) designates a nonbank entity for supervision, and more time for such entity to weigh in on such disclosure, were approved last week and will take effect upon publication in the Federal Register, the bureau said.

The changes, adopted last Thursday, follow comments received by the bureau to an April 2022 final rule, which explains when nonbank financial companies deemed to pose a risk to consumers will be examined by the bureau.

Under Thursday’s action, the final rule:

  • Codifies a standard to govern information that will not be included in the public release of a designation decision: The bureau said it will not publish information that would fall within two Freedom of Information Act (FOIA) exemptions, which protect confidential commercial information and personal privacy. It says it can also withhold information when there is other good cause to do so – for instance, in order to avoid revealing specific violations of law or specific compliance management deficiencies. “Overall, this approach will provide assurance to the company involved that we will protect specific categories of sensitive information, while not stopping companies from raising concerns about the release of other information,” the bureau said.
  • Extends the time for respondents to provide input related to the bureau’s public release determinations from 7 to 10 business days: This applies to a rule provision allowing a firm the option of expressing its views about whether an order should be publicly released.

The CFPB finalizes rule to increase transparency regarding key nonbank supervision tool