INFiN Statement on the CFPB’s Nonbank Registry Rules
June 3, 2024, Washington, D.C. – INFiN, a Financial Services Alliance, issued the following statement in response to the Consumer Financial Protection Bureau’s (CFPB) new rule establishing a federal registry for non-banks relating to public orders and judgments issued by government agencies or courts.
“The CFPB’s non-bank registry for agency and court orders and judgments, creates additional regulatory burdens, duplicates information sources that are already in place and available, and needlessly harms regulated, licensed financial services providers while providing no meaningful benefit for consumers.
“The CFPB’s decision to characterize the registry as one of ‘repeat offenders’ reflects an intent to stack the deck against providers the Bureau disfavors – including licensed small-dollar lenders – saddling registered companies with lasting reputational challenges regardless of the underlying circumstances. The CFPB’s registry creates a ‘never get out of jail’ mentality, built upon an inherent unfairness that past alleged acts are automatically evidence of future guilt.
“By including consent orders, especially those in which no guilt has been admitted, the registry requirements will cause providers to challenge all alleged violations for fear of being labeled a ‘recidivist.’ Responsibly entering consent resolutions often benefits consumers and streamlines the regulatory process, averting protracted, costly litigation. As a result, it would be sound policy to encourage, rather than penalize, their use.
“A registry of non-banks subject to agency and court orders already exists: the Nationwide Multi-State Licensing System and Registry (NMLS) serves this purpose as the system of record for state financial services regulation. The new CFPB registry unjustly targets licensed non-bank providers covered by NMLS, adding burdensome and costly compliance processes while exposing them to reputational risks, potential frivolous legal action, and data security and privacy concerns – all with no corresponding benefit to consumers.”
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About INFiN
INFiN, a Financial Services Alliance, is the leading national trade association representing the diverse and innovative consumer financial services industry. Formerly Financial Service Centers of America (FiSCA), INFiN members deliver critical products and services to meet U.S. consumers’ ever-evolving needs and expectations, enabling essential financial inclusion and stability. For more information, visit www.INFiNAlliance.org.