CFPB Updates Its Procedures For Determining Which Nonbanks It Can Supervise

The Consumer Financial Protection Bureau (CFPB) recently issued a new procedural rule to streamline how it determines which nondepository institutions it has the authority to supervise. According to the CFPB, the new rule coincides with a change in organizational structure. But it also indicates an affirmative broadening of its regulatory reach.

Background

The CFPB has supervisory authority over banks, thrifts, and credit unions with assets over $10 billion, as well as their affiliates. (The current list is here.) Beyond that, the Consumer Financial Protection Act (specifically section 1024(a)(1)(C)) also authorizes the CFPB to designate other nondepository institutions for supervision. Specifically, the CFPB can designate for supervision any "covered person" (an offeror or provider of a consumer financial product or service, or its service-providing affiliate) who – "after notice to the covered person and a reasonable opportunity for such covered person to