More CFPB Concerns
Last week AFSA sent a letter to the CFPB reiterating enforcement concerns with the nonbank registry. As AFSA previously noted, the rule is overly broad and conflicts with a multitude of consumer protections already in place at both the federal and state levels. Such 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 letter highlighted four main issues with the rule:
- This new registry seems currently structured to “name and shame” rather than act as a useful tool to effectively monitor and understand financial markets related to nonbanks and reduce any potential risks to consumers.
- The rule is too broad to properly facilitate an effective risk-based nonbank supervision program.
- The personal attestation requirement will create a disincentive for qualified individuals to take on potential exposure to liability and will make it harder for institutions to fill compliance positions and perform obligations to consumers.
- This effort to create a central registry is unnecessary at best and harmful at worst when it conflicts with the multitude of consumer protections and reporting structures already in place that are accessible to consumers and the CFPB alike.
August 29th, 2024
