CFPB looks to rescind nonbank registry, ignore compliance

The Consumer Financial Protection Bureau is considering eliminating a nonbank registry of repeat corporate offenders in yet another rollback of Biden-era rules that would benefit Big Tech firms.

On Friday, the CFPB said in a brief press release that it is considering issuing a notice of proposed rulemaking “to rescind the regulation or narrow its scope.” 

The CFPB’s nonbank registry was created to track nonbanks that violated court orders or local, state and federal consumer protection laws. 

The registry went live in October. Seven large technology firms that are considered “larger participants” in the market for digital consumer payment applications had to register by Jan. 14. Those seven companies are: Apple, Google, Meta, Paypal, Rakuten, Samsung and Square. 

But on Wednesday, the House of Representatives voted to nullify the CFPB’s “larger participant” rule, under a Congressional Review Act resolution. The resolution already passed the Senate and now goes to the president to sign. The larger participant rule sought to hold large nonbank technology firms to the same oversight by the CFPB as large banks.

In its release, the CFPB also said “it will not prioritize enforcement or supervision” of the nonbank registry or of firms that do not meet upcoming compliance deadlines.

The CFPB said the policy “applies to, but is not limited to,” upcoming compliance deadlines in April and July. 

Nonbanks that are already supervised by the CFPB were required to register by April 14, and other covered nonbanks had until July 14 to register. The CFPB said in the headline of its press release that its policy will provide “regulatory relief from registration requirements for small loan providers.”

The intention to roll back yet another Biden-era regulation would benefit Big Tech firms and digital payment app providers that were a major area of focus under former CFPB Director Rohit Chopra. Chopra had specifically targeted large banks and other financial firms that he described as corporate recidivists, breaking the law again and again with few additional sanctions.