CFPB Targets Nonbanks For Supervision

The Consumer Financial Protection Bureau ("CFPB") recently announced that it is going to exercise authority described as "dormant" to supervise nonbanks that are not otherwise subject to the CFPB's supervision authority. Since 2011, the CFPB has limited its supervisory activities to banks, so-called "larger participants" in specific industry sectors such as credit reporting, and mortgage and payday lenders. This expanded supervision authority suggests therefore that the CFPB is focused upon gaining supervisory access to fintechs that are not involved in lending and that offer products or services to consumers. Basically, if a company is considered a "covered person" for purposes of the Consumer Financial Protection Act (the "CFPA", also known as Title X of the Dodd-Frank Act), then the CFPB could potentially claim to have supervisory authority over that company.