CFPB to Invoke "Dormant" Authority Over Nonbank Companies Posing Risks to Consumers
CFPB Director Rohit Chopra stated that the agency will utilize its "dormant authority" to supervise nonbank financial companies suspected of posing risk to consumers.
The CFPB stated that the Dodd-Frank Act authorized CFPB supervision over (i) nonbank mortgage, private student loan and payday loan industries, (ii) “larger participants” in nonbank markets related to consumer reporting, debt collection, student loan servicing, international remittances and auto loan servicing, and (iii) entities "whose activities the CFPB has reasonable cause to determine pose risks to consumers."
The CFPB requested comment on amending the procedural rule that established "supervisory authority based on a risk determination." The procedural update would (i) "authorize the release of certain information about any final [risk] determinations made" and (ii) allow companies to provide input to the CFPB on what information should be released to the public. The CFPB amendment would "add a mechanism for the Bureau to make final decisions and orders" in proceedings where any final risk determination is made. The procedural rule is exempt from the notice-and-comment rulemaking requirements of the Administrative Procedure Act.
The CFPB stated that it "may base such reasonable cause determinations on complaints collected by the CFPB," or on information learned "through whistleblower complaints, state partners, federal partners, or news reports," in addition to information from judicial opinions and administrative decisions.
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