Maryland Legal Alert for Financial Services
CFPB Requires Nonbanks to Publicly Register Consumer Law Violations
On June 3, 2024, the Consumer Financial Protection Bureau (“CFPB”) issued the Nonbank Registration of Orders Final Rule, requiring certain nonbank entities to report final orders related to violations of consumer financial laws, which will be available to the public.
The rule applies to nonbanks providing consumer financial products or services but excludes, among others, FDIC insured depository institutions. Orders that must be registered are those final, public orders issued by agencies or courts that remain in effect on September 16, 2024, that name the nonbank as a party and require the nonbank to take, or refrain from taking, certain actions based on alleged legal violations.
If the nonbank has a qualifying order, the nonbank must submit detailed information about itself, a copy of the order and a recital of all laws that the nonbank allegedly violated. Certain nonbanks subject to CFPB supervision and with $5 million in qualifying annual receipts must additionally designate an executive to oversee the nonbank’s activities and to annually report any noncompliance with the subject order’s obligations.
Practice Pointer: Nonbanks should ensure they are prepared for these new requirements by reviewing existing orders that they are a party to, determining the applicability of this rule to such orders, and identifying the regulatory deadlines for compliance.
For more information, contact Natalie C. Gibson.