CFPB Revises Supervision Rules
This week, the CFPB proposed a rule to revise its supervisory authority over nonbank entities. Under the Dodd-Frank Act, the CFPB has authority to supervise companies it decides pose “risk” to consumers. However, the CFPB has never defined what “risk” is. The previous administration issued a rulemaking allowing it to make such designations public and used this long-dormant authority for the first time. In 2024, a bipartisan group of Members of Congress sent a letter to the CFPB to express their concerns about the nonbank supervision rule.
Previously, the CFPB’s standards for what it considered “risky to consumers” was undefined and far reaching, leading to confusion in the marketplace and potentially limiting credit access. The newly proposed rule is an important step to correct the Bureau’s overreach.
While the CFPB’s new, proposed rule brings important clarification, AFSA’s comment letter will emphasize the need to clarify that state-licensed and state-regulated products do not pose risk to consumers.
August 28th, 2025
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