Proposed Rule2025-08345
Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders; Proposed Rescission
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Published
May 14, 2025
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Consumer Financial Protection Bureau (Bureau or CFPB) is proposing to rescind its rule requiring certain types of nonbank covered persons subject to certain final public orders obtained or issued by a government agency in connection with the offering or provision of a consumer financial product or service to report the existence of the orders and related information to a Bureau registry.
Full Text
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<title>Federal Register, Volume 90 Issue 92 (Wednesday, May 14, 2025)</title>
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[Federal Register Volume 90, Number 92 (Wednesday, May 14, 2025)]
[Proposed Rules]
[Pages 20406-20408]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-08345]
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CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1092
[Docket No. CFPB-2025-0011]
RIN 3170-AB32
Registry of Nonbank Covered Persons Subject to Certain Agency and
Court Orders; Proposed Rescission
AGENCY: Consumer Financial Protection Bureau.
ACTION: Proposed rule; request for comment.
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SUMMARY: The Consumer Financial Protection Bureau (Bureau or CFPB) is
proposing to rescind its rule requiring certain types of nonbank
covered persons subject to certain final public orders obtained or
issued by a government agency in connection with the offering or
provision of a consumer financial product or service to report the
existence of the orders and related information to a Bureau registry.
DATES: Comments must be received on or before June 13, 2025.
ADDRESSES: You may submit responsive information and other comments,
identified by Docket No. CFPB-2025-0011, by any of the following
methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments. A brief summary of
this document will be available at <a href="https://www.regulations.gov/docket/CFPB-2025-0011">https://www.regulations.gov/docket/CFPB-2025-0011</a>.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#32000200071f7c62607f1f7d40565740416057555b4146404b60574257535e72515442501c555d44"><span class="__cf_email__" data-cfemail="17252725223a5947455a3a5865737265644572707e6463656e45726772767b577471677539707861">[email protected]</span></a>. Include
Docket No. CFPB-2025-0011 in the subject line of the message.
<bullet> Mail/Hand Delivery/Courier: Comment Intake--Registry of
Nonbank Covered Persons Subject to Certain Agency and Court Orders;
Proposed Rescission, c/o Legal Division Docket Manager, Consumer
Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552.
Instructions: The CFPB encourages the early submission of comments.
All submissions should include the agency name and docket number.
Additionally, where the Bureau has asked for specific comment on a
topic, commentors should seek to highlight the topic to which its
comment is applicable. Because paper mail is subject to delay,
commenters are encouraged to submit comments electronically. In
general, all comments received will be posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. All submissions, including attachments and other
supporting materials, will become part
[[Page 20407]]
of the public record and subject to public disclosure. Proprietary
information or sensitive personal information, such as account numbers
or Social Security numbers, or names of other individuals, should not
be included. Submissions will not be edited to remove any identifying
or contact information.
FOR FURTHER INFORMATION CONTACT: George Karithanom, Regulatory
Implementation and Guidance Program Analyst, Office of Regulations, at
202-435-7700. If you require this document in an alternative electronic
format, please contact <a href="/cdn-cgi/l/email-protection#aae9ecfae8f5ebc9c9cfd9d9c3c8c3c6c3ded3eac9ccdac884cdc5dc"><span class="__cf_email__" data-cfemail="62212432203d2301010711110b000b0e0b161b22010412004c050d14">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Description of the Proposed Rule
Pursuant to its authority under sections 1022(b); 1022(c)(1)-(4),
(7); and 1024(b) of the Consumer Financial Protection Act of 2010, 12
U.S.C. 5512 and 5514, the Bureau is proposing to rescind the rule and
regulations adopted on July 8, 2024, via 89 FR 56028, Registry of
Nonbank Covered Persons Subject to Certain Agency and Court Orders, and
codified in 12 CFR part 1092 (the ``NBR Rule''). That rule requires
certain types of nonbank covered persons subject to certain final
public orders of a government agency to report the existence of the
orders and related information and to file annual compliance reports.
The Bureau is proposing to repeal the rule and is seeking comments on
that proposal, including non-speculative and methodologically rigorous
analysis of the purported benefits and costs that were identified when
the rule was promulgated.
The Bureau is proposing to rescind the NBR Rule based upon concern
that the costs the rule imposes on regulated entities, and which may in
large part be passed onto consumers, are not justified by the
speculative and unquantified benefits to consumers discussed in the
analysis proffered in the NBR Rule. The significant regulatory burden
imposed by the NBR Rule has been highlighted by numerous commenters
other than the regulated entities, including the Small Business
Administration's Office of Advocacy and the Conference of State Bank
Supervisors. The Bureau further believes that the NBR Rule is not
necessary as a tool to effectively monitor and reduce potential risks
to consumers from bad actors as Congress has authorized multiple other
Federal and State agencies to enforce Federal consumer financial laws.
II. Proposed Effective Date of Final Rule
The Bureau is proposing to make this rule effective on the date
that any rule finalizing this proposal is published in the Federal
Register. The Bureau believes that, because this rule would rescind all
information submission requirements under the NBR Rule, regulated
entities would benefit from the rescission becoming effective
immediately upon publication of a final rule and doing so would not be
disruptive to their business operations.
The Administrative Procedure Act (APA) generally requires that a
substantive rule be published ``not less than 30 days before its
effective date,'' subject to exceptions.\1\ The Bureau preliminarily
finds that two of the APA's exceptions would apply to the proposed
rescission rule. First, the rule would ``grant[ ] or recognize[ ] an
exemption or relieve[ ] a restriction.'' \2\ Second, there is ``good
cause'' for the rescission to be immediately effective upon
publication, because the rescission would end all information
submission requirements for regulated entities and so is not the kind
of rule for which regulated entities would need additional time to
conform their conduct.\3\
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\1\ 5 U.S.C. 553(d).
\2\ 5 U.S.C. 553(d)(1).
\3\ 5 U.S.C. 553(d)(3).
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The Bureau seeks specific comment on this proposal to make the rule
effective immediately upon publication in the Federal Register,
including whether there are any considerations that would, in the
alternative, support the rule being published 30 or 60 days before
becoming effective.
III. Dodd-Frank Act Section 1022(b)(2) Analysis
A. Overview
In developing this proposal to rescind the NBR Rule, the Bureau has
considered the potential benefits, costs, and impacts of doing so. The
recission would eliminate the requirement for nonbanks to report the
existence of certain public agency and court orders obtained or issued
by a government agency in connection with the offering or provision of
a consumer financial product or service and related information to a
Bureau registry. The Bureau is proposing to rescind the NBR Rule based
upon concern that the costs the rule imposes on regulated entities, and
which may in large part be passed onto consumers, are not justified by
the speculative and unquantified benefits to consumers discussed in the
analysis proffered in the NBR Rule. The Bureau further believes that
the NBR Rule is not necessary as a tool to effectively monitor and
reduce potential risks to consumers from bad actors as Congress has
authorized multiple other Federal and State agencies to enforce Federal
consumer financial laws.
The rescission of the NBR Rule would largely entail a juxtaposition
of the estimated costs and purported benefits discussed in the preamble
of the NBR Rule, such that the estimated costs discussed in the NBR
Rule would constitute the benefits of a recission, and the purported
benefits discussed in the NBR Rule would constitute the costs of a
recission. However, even if finalized, the rescission of the NBR Rule
will not fully restore the baseline that would capture the NBR Rule's
impacts. For example, some of the fixed costs of compliance discussed
in the ``Dodd-Frank Act Section 1022(b)(2) Analysis'' section of the
NBR Rule \4\ have already been expended.\5\ As such they are, perhaps
to varying extents depending on each covered person's circumstances,
unrecoverable. In addition, some of the costs that were quantified in
the NBR Rule, and which are in fact recoverable by nonbank covered
persons subject to the NBR Rule, may become benefits under this
proposed rule. However, the quantification of the resulting benefits
may differ from that of the corresponding costs discussed in the NBR
Rule to the extent that the wage rates or other factors considered in
the Bureau's estimations have changed.
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\4\ 89 FR 56028, 56134-43 (July 8, 2024).
\5\ For example, as of April 15, 2025, approximately 212 unique
entities have already registered orders under the NBR Rule
(including entities that utilized the one-time registration option
provided for in 12 CFR 1092.203).
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The Bureau seeks specific comment on the extent to which the costs
discussed in the NBR Rule, if reversed by the proposed rescission,
would result in the benefit of reduced compliance burden to nonbank
entities. Correspondingly, the Bureau seeks specific comment on the
extent to which the purported benefits discussed in the NBR Rule would
result in additional costs to consumers as a direct result of a
recission. Because the purported benefits discussed in the NBR Rule
were largely speculative and unquantified, the Bureau is specifically
interested in any comments that could model such benefits in a
quantitative and methodologically rigorous manner.
[[Page 20408]]
B. Potential Specific Impacts of the Proposed Rule
1. Insured Depository Institutions and Insured Credit Unions With $10
Billion or Less in Total Assets, as Described in Section 1026
This proposed rule would not apply to insured depository
institutions or insured credit unions. Therefore, it would have no
direct impacts on any insured depository institution or insured credit
union. Some insured depository institutions or insured credit unions
may experience indirect effects; for example, some of these
institutions may have nonbank affiliates that would be economically
affected by the proposal. However, the Bureau expects that any indirect
effects of the proposed rule on insured depository institutions or
insured credit unions would be small enough to render them negligible.
The Bureau seeks specific comment on the accuracy of this expectation.
2. Impact of the Proposed Rule on Access to Consumer Financial Products
and Services and on Consumers in Rural Areas
The proposed rescission of the NBR Rule would not impose new costs
on covered nonbanks and may cause some nonbanks to experience a
transitory increase in profitability as a result of reduced compliance
burden associated with the NBR Rule. Some of this increase in
profitability may be directed by nonbanks to investments in the
research and development of new products. Accordingly, the access of
consumers, including consumers in rural areas, to consumer financial
products and services could be improved as a result of the proposed
recission of the NBR Rule. The Bureau seeks specific comment on the
character and extent of this potential improvement in access to
consumers.
IV. Necessity of Regulation
Executive Order 12866 states that ``Federal agencies should
promulgate only such regulations as are required by law, are necessary
to interpret the law, or are made necessary by compelling public need,
such as material failures of private markets . . .'' The Bureau seeks
specific comment regarding whether there is any data, and in particular
methodologically rigorous research, to indicate the existence of a
market failure that would justify the retention of the NBR Rule.
V. Regulatory Flexibility Act Analysis
a. Overview
The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct an initial regulatory flexibility analysis (IRFA) and a
final regulatory flexibility analysis (FRFA) of any rule subject to
notice-and-comment rulemaking requirements, unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities.\6\ The Bureau also is subject to
certain additional procedures under the RFA involving the convening of
a panel to consult with small business representatives before proposing
a rule for which an IRFA is required.\7\
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\6\ 5 U.S.C. 601 et seq.
\7\ 5 U.S.C. 609.
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An IRFA is not required for this proposed rule because, for the
reasons explained below, the proposed rule, if adopted, would not have
a significant economic impact on a substantial number of small
entities.
b. Impact of Proposed Rule on Small Entities
The proposed rule would rescind all the provisions of the NBR Rule.
As a result and as a matter of principle, the potential economic impact
on small entities, as defined by the RFA, would involve the reversal of
any of the benefits and costs the provisions of the NBR Rule provide to
small entities.\8\ If finalized, the proposed rule would result in
symmetrical (i.e., similar in magnitude to the costs and benefits of
the NBR Rule) impacts to small entities. The ``Regulatory Flexibility
Act Analysis'' section of the NBR Rule \9\ considered the impacts of
the NBR Rule and found that the rule would not have a significant
economic impact on a substantial number of small entities. Similarly,
the Bureau believes that the proposed rescission of the NBR Rule would
not have a significant economic impact on a substantial number of small
entities.
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\8\ For purposes of assessing the impacts of the proposed rule
on small entities, ``small entities'' is defined in the RFA to
include small businesses, small not-for-profit organizations, and
small government jurisdictions. 5 U.S.C. 601(6). A ``small
business'' is determined by application of Small Business
Administration regulations and reference to the North American
Industry Classification System (NAICS) classifications and size
standards. 5 U.S.C. 601(3). A ``small organization'' is any ``not-
for-profit enterprise which is independently owned and operated and
is not dominant in its field.'' 5 U.S.C. 601(4). A ``small
governmental jurisdiction'' is the government of a city, county,
town, township, village, school district, or special district with a
population of less than 50,000. 5 U.S.C. 601(5).
\9\ 89 FR 56028, 56143-49 (July 8, 2024).
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Accordingly, the Acting Director hereby certifies that this
proposed rule, if adopted, would not have a significant economic impact
on a substantial number of small entities. Thus, neither an IRFA nor a
small business review panel is required for this proposal. The Bureau
requests comment on the analysis above.
List of Subjects in 12 CFR Part 1092
Administrative practice and procedure, Consumer protection, Credit,
Intergovernmental relations, Law enforcement, Nonbank registration,
Registration, Reporting and recordkeeping requirements, Trade
practices.
PART 1092--[REMOVED AND RESERVED]
As discussed above and under the authority of 12 U.S.C. 5512 and
5514, the Bureau proposes to remove and reserve 12 CFR part 1092.
Russell Vought,
Acting Director, Consumer Financial Protection Bureau.
[FR Doc. 2025-08345 Filed 5-13-25; 8:45 am]
BILLING CODE 4810-AM-P
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