Perhaps the biggest news that came from the Consumer Financial Protection Bureau (CFPB) last Friday afternoon, April 11, is that there’s news at all from the agency. The CFPB had been all but shuttered recently under Acting Director Russell Vought, but has now re-emerged and seems more aligned with the Trump Administration 2.0's priorities.
In its brief release, the CFPB said it “will not prioritize enforcement or supervision actions with regard to entities that do not satisfy future deadlines” under a specific regulation that requires submission of registration information. That regulation is “Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders, 89 Fed. Reg. 56028,” codified at 12 CFR part 1092.
Specifically, the regulation “prescribes rules governing the registration of nonbanks, and the collection and submission of registration information by such persons.”
CFPB noted the new policy applies but is not limited to certain nonbanks, including:
“The Bureau is further considering issuing a notice of proposed rulemaking to rescind the regulation [noted above] or narrow its scope,” the CFPB stated in its release.
The regulation created a registry "requiring certain nonbank entities to register information about their company and certain orders, as well as submit copies of those orders, to the CFPB." It applied to "certain nonbanks that are 'covered persons' under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)" and in general, covered persons participating in offering or providing consumer financial products or services. See more on who is and is not covered by this regulation.
After the CFPB's announcement came, the Community Home Lenders of America (CHLA), which sent a letter in mid-February laying out various suggested reforms to streamline CFPB regulation of smaller independent mortgage banks, or IMBs, quickly claimed the action taken by the CFPB as a victory.
Among other things, the CHLA's letter stated the CFPB “should immediately suspend court order registry requirements for IMBs and withdraw its proposed form contracts rule,” contending that “both are redundant and unnecessary.”
“The CFPB announced that the registry would be deprioritized and considered for rescission,” Taylor Stork, CMB, president of the CHLA and chief operating officer at Columbus, Ohio-based Developer’s Mortgage Company, stated in a post on LinkedIn. “This is what turning advocacy into action looks like!”
A Refreshed CFPB
In its release, the CFPB noted it will continue to focus its enforcement and supervision activities on “pressing threats to consumers.” But a further signoff statement from the agency carried a refreshed sort of tone — one that's a bit more business friendly and emphasizes that the CFPB enforces federal consumer protection law, versus a prior focus and M.O. that some policymakers argued lacked appropriate oversight.
“The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive,” the CFPB stated.
