6 Things to Know About the CFPB’s New Nonbank Supervision Program
“Nonbanks” sounds like an overly inclusive generic term, but people who file Las Vegas bankruptcy deal with them all the time. A nonbank is a company that offers consumers financial products or services without a bank, thrift, or credit union charter. Examples include payday lenders, debt collectors, and credit reporting bureaus. The Consumer Financial Protection Bureau (CFPB), whose director, Richard Cordray, was finally confirmed by the U.S. Senate, recently enacted a program for supervising nonbanks. Here are six things to know about the program.
- The Dodd-Frank Act creates and authorizes the CFPB to ensure that consumers receive consistent application of federal consumer protection laws on a consistent basis. The nonbank supervision program is a part of that.
- The CFPB intends to phase in the supervision program, beginning with the businesses of all sizes in certain markets: mortgage companies, payday lenders, and private education lenders.
- The agency then intends to extend the program to “larger participants”—a term even the CFPB concedes it hasn’t defined—such as debt collectors, consumer reporters, auto financing, and money services businesses. The CFPB intends to hear public feedback on how “larger participants” should be defined.
- The CFPB will also supervise nonbanks that it believes are or have engaged in conduct that poses a threat to consumers of financial products or services.
- The nonbank supervision program will work by “requiring nonbanks to file certain reports, reviewing the materials the companies actually use to offer those products and services, reviewing their compliance systems and procedures, and reviewing what they promised consumers.”
- The nonbank supervision program will assess the risks nonbanks’ behavior imposes on consumers, including their volumes of business, the types of products or services they sell, and the extent of state oversight on them depending on where they are located.
The CFPB’s press release can be found here. Hopefully, the nonbank supervision program will ensure that nonbanks do not exploit consumers and force them into bankruptcy, but if you are encountering financial difficulty and a nonbank like a debt collector or payday lender is involved, then contact an experienced Las Vegas bankruptcy lawyer to find out what your options are.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.