The Dodd-Frank Act, signed into law last year, gives the CFPB the job of supervising large banks, as well as some other types of financial companies, for compliance with federal consumer financial protection laws. While banks, thrifts, and credit unions have been subject to examinations by various federal regulators in the past, other types of companies providing consumer financial products and services have not. One of the goals of the new law is to better protect consumers by expanding this type of supervision to nonbank companies. The examination of nonbank companies will be a crucial piece of the CFPB’s work. For the first time, many of these nonbank financial companies will be subject to federal oversight.
Under the new law, our nonbank supervision program will be able to look at companies of all sizes in the mortgage, payday lending, and private student lending markets. But for all other markets—like consumer installment loans, money transmitting, and debt collection—the CFPB generally can supervise only larger participants. Before we can do that, however, we need to define through a rule, no later than July 21, 2012, who is a “larger participant” in these markets.
We have been taking public input on how we should define a “larger participant” in this rule. We published a Notice and of Proposed Rulemaking (Notice) in February and received dozens of submissions. These public comments will help the CFPB make the best use of its resources to protect American consumers.
The CFPB is committed to principles of open government and to maintaining a robust dialogue with stakeholders and the public. Your comments on this Notice will help the CFPB define “larger participants” and put in place an important building block in its nonbank supervision program.
Please see the Notice for more information.
- Full notice of proposed rulemaking: Defining Larger Participants in Certain Consumer Financial Products and Services Markets
- From the blog: Explainer: What is a nonbank, and what makes one “larger”?
- Press release: Consumer Financial Protection Bureau proposes rule to supervise larger participants in consumer debt collection and consumer reporting markets