CFPB Issues Proposed Rule On Standard For "Risks To Consumers"

On August 26, 2025, the Consumer Financial Protection Bureau (CFPB or the Bureau) published a proposed rule that, if finalized, would provide a standard for the term "risks to consumers" as used in Section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010 (CFPA).¹ The proposed rule could substantially reduce the scope of the CFPB's authority to supervise nonbank entities.

Background

The CFPA authorizes the Bureau to supervise a nonbank covered person whom 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...."² The proposed rule would provide that "risks to consumers," for purposes of this provision of the CFPA, is conduct that (a) presents a high likelihood of significant harm to consumers; and (b) is directly connected to the offering or provision of a consumer financial product or service as