AFSA Responds to CFPB’s Proposed Nonbank Registry
Today, AFSA responded to the CFPB’s proposed nonbank registry related to enforcement. The proposed rule would require nonbank-covered persons to register and submit specific information to the proposed registry regarding final, public orders issued by federal, state, or local agencies or courts. AFSA is concerned that the new registry seems currently structured to “name and shame” rather than act as a useful tool to effectively monitor and reduce any potential risks to consumers. The letter outlines three key issues AFSA finds with the proposed registry:
- The CFPB does not have the authority to create the executive attestation requirement.
- The proposed rule is overly broad and conflicts with a multitude of consumer protections already in place.
- A backward-looking registry is illogical and could lead to multiple actions by multiple regulators for the same activity that has already been addressed.
The registry as proposed would create a chilling effect on the ability of nonbank financial institutions and state agencies to resolve matters. The institutions may be much less willing to enter into consent agreements if they know that it is going to be included in such a registry and leave them vulnerable as a potential target for trivial class-action lawsuits. The attorneys that bring these class-action suits would benefit more from the proposed rule than consumers would. AFSA and its members continue to work with the CFPB to ensure that American consumers have access to safe credit, but we do not believe the proposed registry is aligned with this goal.
March 31st, 2023
