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CFPB to Create Registry of Consumer Law-Breaking Nonbank Financial Companies

The Consumer Financial Protection Bureau (CFPB) issued a final rule to establish a registry of nonbank financial companies that have broken consumer laws and are subject to federal, state or local government or court orders.

The registry is meant to help law enforcement across the United States identify and stop repeat offenders, the agency said in a Monday (June 23) press release.

“Too many American families have been harmed by corporate repeat offenders in a rinse-and-repeat cycle of illegality, where bad actors see fines and penalties as the cost of doing business,” CFPB Director Rohit Chopra said in prepared remarks issued Monday. “Throughout our economy, we have seen fraudsters and scam artists get caught in one part of the country and restart their scheme in a new place hoping to not get caught again.”

Currently, orders are publicly available but are not tracked, according to the press release. Unlike banks, credit unions and many mortgage companies, many other types of financial institutions are not licensed or registered.

With its new registry, the CFPB aims to help state attorneys general, state regulators and other law enforcement agencies better understand fraudsters, and to assist investors, creditors, business partners and members of the public in conducting due diligence, the release said.

Under the final rule, covered nonbank companies must register with the CFPB when they have been caught violating consumer law and must provide an attestation from a senior executive that the company follows any relevant orders, per the release.

“The registry established in today’s rule will capture agency and court orders stemming from federal, state and local enforcement actions,” Chopra said in his prepared remarks. “The registry will allow the CFPB to better identify and act on enforcement trends, identify and monitor repeat offenders, and most importantly, ensure consumers are protected from any endemic risks. The same holds true for state and local authorities.”

The CFPB initially proposed the creation of an online registry of nonbank financial lawbreakers in December 2022.

At the time, the agency said that its semi-annual report found that it had received about 872,400 complaints over the previous year, which was a 33% increase from the previous reporting period.