Consumer Financial Protection Bureau Launches Program

Consumer Financial Protection Bureau Launches Nonbank Supervision Program

One day after Richard Cordray was appointed as the director of the Consumer Financial Protection Bureau (CFPB), the new bureau officially launched their nonbank supervisory program. The CFPB defines a nonbank as a company that offers or provides consumer financial products or services but does not have a bank, thrift or credit union charter.

 The CFPB’s supervision program for large banks, thrifts and credit unions with assets of over $10 billion has been in effect since the bureau’s official opening in July.  The CFPB has stated that the other areas of the nonbank supervision program will now begin in phases.

 The next phase of regulation will give the CFPB authority to oversee nonbank businesses, regardless of size, in certain markets: mortgage companies (originators, brokers, and servicers, and loan modification or foreclosure relief services); payday lenders; and private education lenders.

 For all other markets - encompassing credit and collection professionals - the CFPB will begin supervision for only “larger market participants,” which the bureau is still in the process of defining.