AFSA Submits Letter to Bureau on Nonbank Supervision
On May 31, AFSA submitted a letter to the Consumer Financial Protection Bureau (CFPB) regarding proposed changes to its Supervisory Authority Over Certain Nonbank Covered Persons. These changes would allow the Bureau to publicize its designation of a nonbank covered person as a “risky business.” The letter expresses concern that the change in the confidentiality of proceedings would create unfair distrust of the named companies, especially given that the Bureau has still not defined what it considers a “risk to consumers.”
If the Bureau designates a business as risky, it sends a message to the market that something is wrong with that business. Without the ability to make public remarks about the supervision, the business would be left without a way to defend itself against the harmful designation. This public designation is especially problematic as there is still a lack of a clear and concise definition of the “risks to consumers” from the Bureau. As AFSA’s letter notes, “providing a bright-line definition would clarify to the covered persons what the Bureau considers inappropriate conduct and aid the Bureau in allocating its time to properly supervise truly risky businesses.”
May 31st, 2022
