CFPB Looks To Amend Supervisory Designation Proceedings

On September 25, the CFPB finalized a rule rescinding its several Biden-era amendments to the risk-based supervisory designation process and reinstating the Bureau's 2013 framework under the Dodd-Frank Act. The rule, effective October 27, restores confidentiality of decisions and orders, revives the role of a recommending official, and eliminates several procedural changes made in 2022-2024.

Under the Bureau's risk-based supervision process, the CFPB can exercise supervisory authority over any persons or entities that "the Bureau has reasonable cause to determine [...] is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services." Under the Biden-era amendments, the CFPB eliminated internal checks on review, limited certain procedural safeguards, and gave the CFPB director the discretion to release supervisory designation materials publicly for companies that contested