CFPB Reinstates Confidential Supervisory Designation Process

The Consumer Financial Protection Bureau ("CFPB") issued a final rule rescinding earlier amendments to its "Procedures for Supervisory Designation Proceedings" and restoring the rule’s original framework with limited modifications.

The CFPB said that the most significant change in the final rule is reversing a prior policy that allowed public release of contested designation orders, which would revert back to being treated as confidential supervisory information. The agency also said that while most changes would be rescinded under the final rule, it is retaining limited process updates, including (i) reinstating a recommended determination step by a "recommending official," (ii) permitting written replies by the initiating official, (iii) allowing video conferences for supplemental oral responses, (iv) codifying supplemental briefing, (v) simplifying voluntary consent agreements, and (vi) updating the definition of "initiating official."

The CFPB stated that it adopted the final rule to address harms from publishing designation orders. The agency explained that such orders (i) risk reputational harm by pressuring firms to consent even when they have valid defenses; (ii) provide limited transparency, since necessary redactions may mislead and most firms already consent voluntarily; and (iii) are not the best way to ensure consistency, which it concluded is better achieved through separate rulemaking to define the applicable legal standard.

The CFPB stated that the final rule will be effective October 27, 2025.