Nonbank “covered persons” who are subject to court or government agency’s final public orders related to offering or providing consumer financial products or services no longer need to get themselves on a registry maintained by the Consumer Financial Protection Bureau (CFPB), effective Wednesday (Oct. 29).
The CFPB issued its final rule creating this registry in July 2024, and the bureau this year, now headed in “acting” capacity by Office of Management and Budget (OMB) Director Russell Vought, proposed its recission this May. The bureau reports receiving 16 comment letters from financial trade organizations, the Small Business Administration (SBA) Office of Advocacy, the “State financial regulator association,” a handful of individuals and two nonprofit organizations.
Among the comments was a letter provided jointly from banking industry trades, which addressed the groups’ previously raised objections to the rule’s inclusion of nonbank affiliates of insured depository institutions and insured credit unions and to the rule’s written-statement requirements. Also, it said, a credit union trade association objected to the rule’s coverage of credit union service organizations (CUSOs) and privately insured credit unions, stating that these organizations have been effectively regulated by state authorities and the National Credit Union Administration, respectively.
Another industry trade, the bureau said, asserted that the rule’s application to consent orders entered into prior to the rule’s promulgation “imposes unfair burdens on entities that agreed to such orders without knowing of potential exposure to penalties for failing to comply with the registration requirements, ….”
Also published in the Register Wednesday were the following:
- Rescission, revised rules of practice for adjudications proceedings: Effective Wednesday, the bureau’s 2022 and 2023 changes to the bureau’s amendments to these rules are rescinded. The bureau said the proposed recission applied to a new deposition process, amendments concerning timing and deadlines, bifurcation of proceedings, the process for deciding dispositive motions, and requirements for issue exhaustion, as well as other technical changes. “After considering the comments on the proposal, the CFPB has decided to rescind the amendments as proposed, except as related to narrow clarificatory and procedural changes,” it said.
- Withdrawal, proposed registry of supervised nonbanks using form contracts that limit consumers’ legal protections: The bureau in 2023 proposed a rule that it said would require nonbanks subject to its supervisory authority, with limited exceptions, to yearly register information about their use of certain terms and conditions in form contracts for consumer financial products and services that pose risks to consumers. “In particular, these nonbanks would be required to register if they use specific terms and conditions defined in the proposed rule that attempt to waive consumers’ legal protections, to limit how consumers enforce their rights, or to restrict consumers’ ability to file complaints or post reviews,” it said at the time. One stated aim was to facilitate public awareness and oversight by other regulators, including the states. Wednesday’s notice says the bureau “will not” take any further action regarding this proposal.
Federal Register notice, nonbank persons registry
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