CFPB Plans To Create A Registry Of Nonbank Businesses

On Monday, June 3, 2024, The Consumer Financial Protection Bureau finalized its plan to create a registry of nonbank businesses. These businesses will be penalized for breaching consumer protection laws. 

The Consumer Bureau said, “Our goal is to make it easier for consumers, watchdogs, and government prosecutors to identify patterns and recurrences.”

Rohit Chopra, the director of CFPB said in a conference, “Too many American families and businesses have been harmed by repeat offenders in a rinse-and-repeat cycle of illegal activity. When companies believe that violating the law is more profitable than following it, this totally undermines public trust and harms businesses who are playing by the rules.”

The bureau judges that a minimum of 1500 and a maximum of 7,750 companies will be listed in this registry. State, federal, and local governments and court orders opposing companies with a history of sanctions for lawbreaking will be contained in the registry. This registry will also include companies that have legally resolved issues without admitting lawlessness.

The CFPB shared that it would omit those banks and credit unions from the registry, which are frequently targeted by fines. It’s because the four federal regulators publicly publish consumer protection orders for them. 

CFPB first proposed this plan in late 2022, but business lobbyists opposed it. Six trade groups, including the U.S. Chamber of Commerce, sent a criticizing letter to the bureau, saying the registry is burdensome and unnecessary. 

These groups also wrote in the letter, “Naming and shaming companies and their executives may win headlines and collecting consent orders may give plaintiffs’ attorneys a road map for litigation, but neither helps consumers.” 

The order database containing state, federal, and local governments and court orders will help the bureau’s complaint database. This will allow people to file grievances about inaccurate bills, illegal fees, overdraft charges and other issues. 

Leave a Reply