Rule2025-19689
Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders; Rescission
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 29, 2025
Effective
October 29, 2025
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Consumer Financial Protection Bureau (Bureau or CFPB) is issuing a final rule 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 207 (Wednesday, October 29, 2025)</title>
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[Federal Register Volume 90, Number 207 (Wednesday, October 29, 2025)]
[Rules and Regulations]
[Pages 48760-48776]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19689]
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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; Rescission
AGENCY: Consumer Financial Protection Bureau.
ACTION: Final rule.
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SUMMARY: The Consumer Financial Protection Bureau (Bureau or CFPB) is
issuing a final rule 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: This rule is effective on October 29, 2025.
FOR FURTHER INFORMATION CONTACT: Dave Gettler, Paralegal, 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#d99a9f899b8698bababcaaaab0bbb0b5b0ada099babfa9bbf7beb6af"><span class="__cf_email__" data-cfemail="99dadfc9dbc6d8fafafceaeaf0fbf0f5f0ede0d9faffe9fbb7fef6ef">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Summary of the Final Rule
Pursuant to its authority under sections 1022(b), 1022(c)(1)-(4),
and 1024(b) of the Consumer Financial Protection Act of 2010, 12 U.S.C.
5512 and 5514 (CFPA), the Bureau is adopting this final rule to rescind
its rule 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''). The NBR Rule requires
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 those orders and related information
to a Bureau registry.
The Bureau is finalizing the rescission of the NBR Rule based on
concerns that the costs the rule imposes on regulated entities, which
may be passed on to consumers, are not justified by the speculative and
unquantified benefits to consumers discussed in the analysis proffered
in the NBR Rule. In addition, the Bureau is finalizing this rescission
based in part on the cost to the Bureau of maintaining the registration
system created by the NBR Rule, which the Bureau believes is not a
necessary tool to effectively monitor and reduce potential risks to
consumers.
II. Background
A. The NBR Rule
The Bureau published the NBR Rule in the Federal Register on July
8, 2024, and it took effect on September 16, 2024. The Bureau stated
that it was issuing the NBR Rule, as described below, because it
believed the statutory purposes of the Bureau's market monitoring and
nonbank supervision responsibilities would be furthered by the
collection and publication of information about the existence of
covered orders at covered nonbanks, and in the case of supervised
registered entities, steps taken to comply with those covered orders.
Specifically, it believed that the Bureau's establishment of a
centralized system for collecting and publishing information about
covered orders against covered nonbanks would lead to more efficient
and effective monitoring, detection, assessment, public awareness, and
mitigation of the risks posed to consumers by violations of Federal
consumer financial law, including repeat violations. The NBR Rule
generally found that such outcomes, if achieved, would be beneficial to
consumers.
Underlying the purported utility of the NBR Rule was the Bureau's
repeated assertion that the registry established by the rule would help
to address risks to consumers related to corporate recidivism engaged
in by covered nonbanks. For example, the Bureau stated that the NBR
Rule would ``focus on monitoring for risks to consumers related to
repeat offenders of consumer protection law'' and that a public
registry ``will help the Bureau and the broader public monitor trends
concerning corporate recidivism relating to consumer protection law,
including areas where prior violations of law are indicia of risks to
consumers.'' \1\ In addition, the Bureau stated that the registry
``will provide a valuable mechanism to help ensure the Bureau is
rapidly made aware of . . . repeat offenders across a range of markets
and enforcement agencies.'' \2\ According to the Bureau's analysis,
``repeat law violator status . . . is a highly pertinent
characteristic'' of nonbank covered persons,\3\ to the extent that the
Bureau intended to ``mitigate recidivism and more effectively deter
unlawful behavior'' by creating a public registry.\4\ Thus, while
maintaining that ``the registry will accomplish a number of goals,''
the Bureau emphasized that it would have ``a particular focus on
monitoring for risks to consumers related to repeat offenders of
consumer protection law.'' \5\
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\1\ 89 FR 56028 at 56029-30.
\2\ Id. at 56035; see also id. at 56031 (stating the Bureau's
belief that monitoring for covered orders ``will allow the Bureau to
track specific instances of, and more general developments
regarding, potential corporate recidivism'').
\3\ Id. at 56036.
\4\ Id. at 56042.
\5\ Id. at 56062.
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The NBR Rule imposes information collection requirements on most
nonbank covered persons to the extent they are subject to certain
public agency and court orders, including orders under numerous
different provisions in Federal and State law (``covered orders'').\6\
Specifically, the NBR Rule contains three sets of provisions: (1) a
covered order registration requirement for virtually all nonbanks
engaged in the offering or providing of any consumer financial product
or service (``covered nonbanks''); \7\ (2) an annual covered
[[Page 48761]]
order compliance reporting requirement for Bureau-supervised registered
entities; and (3) provisions authorizing the Bureau to publish certain
information collected pursuant to the registration requirement.\8\
Below, this final rule provides general background on key aspects of
each of these sets of provisions.\9\
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\6\ In Sec. 1092.201(e), the NBR Rule defines a ``covered
order'' as an order that, among other things, has an effective date
on or after January 1, 2017, and imposes certain obligations on the
covered nonbank based on an alleged violation of a covered law. In
Sec. 1092.201(c), the regulation defines ``covered law'' as
including Federal consumer financial law as well as a number of
other laws enforced by the Bureau, the prohibition against unfair or
deceptive acts or practices in section 5 of the Federal Trade
Commission Act and its implementing rules enforced by other Federal
agencies, and certain State laws as described in Sec.
1092.202(c)(4)-(6), including several hundred of which are specified
in appendix A to part 1092.
\7\ In Sec. 1092.201(d), the NBR Rule defines ``covered
nonbank'' as including most types of nonbanks, with specified
exceptions for insured depository institutions, insured credit
unions, a person who is a covered person solely due to being a
related person, a State, a natural person, certain motor vehicle
dealers, and persons subject to certain exclusions in CFPA section
1027.
\8\ Covered nonbanks also must submit required information in
accordance with the Bureau's filing instructions. See Sec.
1090.102(a); CFPB Nonbank Registration Filing Instructions Guide
(FIG) (Jan. 2025), <a href="https://files.consumerfinance.gov/f/documents/cfpb_nonbank-registration_filing-instructions-guide.pdf">https://files.consumerfinance.gov/f/documents/cfpb_nonbank-registration_filing-instructions-guide.pdf</a>.
\9\ The NBR Rule also contains provisions pursuant to which
persons may submit filings to the Bureau's nonbank registry stating
that they have a good-faith basis to believe that the NBR Rule or
one or more of its provisions does not apply. See Sec. 1092.202(g)
& 204(f). These are not mandatory information collection
requirements and are not discussed further here.
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First, the NBR Rule generally requires registration by covered
nonbanks that are subject to covered orders that are in effect as of
September 16, 2024, or that take effect on that date or at any later
time. The NBR Rule requires these covered nonbanks to register with the
Bureau and to submit certain information about each covered order to
the Bureau.\10\ Under Sec. 1092.202(b), each covered nonbank must
submit identifying information and administrative information as
described in Sec. 1092.202(c),\11\ as well as information regarding
each covered order described in Sec. 1092.202(d) as follows:
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\10\ Registration is required within 90 days after the
applicable nonbank registry implementation date, or 90 days after
the effective date of the covered order, whichever is later. See
Sec. 1092.202(b)(2). The implementation dates are October 16, 2024,
for supervised registrants that are larger participants under CFPB
larger participant rules (resulting in a registration deadline of
January 14, 2025), January 14, 2025, for all other supervised
registrants (resulting in a registration deadline of April 14,
2025), and April 14, 2025, for all other covered nonbanks (resulting
in a registration deadline of July 14, 2025). See <a href="https://www.consumerfinance.gov/data-research/nbr-submission/">https://www.consumerfinance.gov/data-research/nbr-submission/</a>.
\11\ In Sec. 1092.201(a), the NBR Rule defines ``administrative
information'' as ``contact information'' regarding the registrant
and ``other information submitted or collected to facilitate
administration'' of the nonbank registry. In Sec. 1092.201(g), the
NBR Rule defines ``identifying information'' as ``existing
information available to the covered nonbank that uniquely
identifies it,'' including certain information further specified in
the definition.
(1) A fully executed, accurate, and complete copy of the covered
order, in a format specified by the Bureau; provided that any
portions of a covered order that are not public shall not be
submitted, and these portions shall be clearly marked on the copy
submitted;
(2) In connection with each applicable covered order,
information identifying:
(i) The agency(ies) and court(s) that issued or obtained the
covered order, as applicable;
(ii) The effective date of the covered order;
(iii) The date of expiration, if any, of the covered order, or a
statement that there is none;
(iv) All covered laws found to have been violated or, for orders
issued upon the parties' consent, alleged to have been violated; and
(v) Any docket, case, tracking, or other similar identifying
number(s) assigned to the covered order by the applicable
agency(ies) or court(s).\12\
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\12\ At the time of registration of a covered order, supervised
registered entities also must provide additional information, as
described in Sec. 1092.202(d)(3) (requiring the name and title of
an ``attesting executive'' for purposes of annual reporting on
covered order compliance as described further below).
The NBR Rule also requires registrants to submit certain updated
information to the Bureau regarding the status of the covered order on
an ongoing basis.\13\
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\13\ For example, registered entities must submit a filing to
the nonbank registry within 90 days after the effective date of a
termination, modification, or abrogation of the covered order, or
its ceasing to be a covered order. See Sec. 1092.202(f).
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Alternatively, for covered orders that are not obtained or issued
by the Bureau and that are published on the NMLS Consumer Access
website at <a href="http://www.NMLS.ConsumerAccess.org">www.NMLS.ConsumerAccess.org</a>,\14\ the covered nonbank may
satisfy the registration requirement by submitting more limited
information for the purposes of identifying the covered nonbank and the
NMLS-published covered order as described in Sec. 1092.203(b) and as
specified in filing instructions provided by the Bureau.\15\ Under this
alternative, there is no requirement to provide updates on an ongoing
basis.
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\14\ See definition of ``NMLS-published covered order'' at Sec.
1092.201(k).
\15\ Currently, the filing instructions require registrants that
register a NMLS-published covered order via optional one-time
registration to provide the order's effective date, identifying
number (e.g., docket or similar tracking number), and, if
applicable, an explanation of any differences between information
entered for the order and the information about the order that is
published on the NMLS Consumer Access website.
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In addition to the information collection requirements for
registration of a covered nonbank described above, the NBR Rule
includes certain related provisions and additional information
requirements, such as a requirement to provide corrected
information.\16\
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\16\ Certain additional requirements and definitions apply to
the registration requirement, as elaborated in Sec. Sec. 1092.200-
203 & 205 and supplemented by subpart A of part 1092. For example,
registered entities must file corrections within 30 days after
becoming aware or having reason to know of an inaccuracy in their
prior submissions. See Sec. 1092.205(c).
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Second, in Sec. 1092.204, the NBR Rule imposes certain additional
annual reporting requirements for covered nonbanks that are Bureau-
supervised registered entities, as defined in Sec. 1092.201(q)
(excluding, among others, entities with less than $5 million in annual
receipts from offering or providing consumer financial products or
services). These annual reporting requirements apply to covered orders
that are not registered as NMLS-published covered orders and that have
an effective date on or after applicable nonbank registry
implementation dates under Sec. 1092.206.\17\ As elaborated in Sec.
1092.204, among other things, the NBR Rule requires the supervised
registered entity to designate an attesting executive for the covered
order (Sec. 1092.204(b)), to provide the attesting executive with
access to certain documents and information (Sec. 1092.204(c)), and to
submit a written statement to the Bureau on an annual basis that
includes the information described in Sec. 1092.204(d)--namely, a
description of the steps the attesting executive has undertaken to
review and oversee the supervised registered entity's activities
subject to the applicable covered order for the preceding calendar year
and an attestation as to whether, to the attesting executive's
knowledge, the supervised registered entity during the preceding
calendar year identified any violations or other instances of
noncompliance with any obligations imposed in a public provision of the
covered order based on a violation of a covered law--and is signed by
the attesting executive.\18\
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\17\ The implementation dates for supervised registrants subject
to the annual reporting requirement are October 16, 2024, for
supervised registrants that are larger participants under CFPB
larger participant rules, and January 14, 2025, for all other
supervised registrants. See <a href="https://www.consumerfinance.gov/data-research/nbr-submission/">https://www.consumerfinance.gov/data-research/nbr-submission/</a>.
\18\ Certain additional requirements and definitions apply to
the written statement requirement, as elaborated in Sec. Sec.
1092.200 & 204 and supplemented by subpart A of part 1092.
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In connection with the NBR Rule, the Bureau provided certain
estimates of the paperwork burdens of the above two information
collection requirements. For the initial registration of a single order
and the first annual report on that order by a supervised registered
entity, the Bureau estimated 35 hours of paperwork burden (5 hours for
the initial registration and 30 hours for the annual report including
recordkeeping costs). It further estimated an overall paperwork burden
on covered nonbanks from these two steps alone as in excess of 271,000
hours.\19\ In dollar terms, the
[[Page 48762]]
NBR Rule estimated that between 1,550 and 7,752 covered nonbanks would
incur a labor cost of $350 each for an initial registration of an order
and $2,100 for a supervised registered entity to comply with an annual
cycle of reporting for an order.\20\ Of course, to the extent any
covered nonbank did in fact have multiple covered orders, its burden
would be higher, and the burden of correction and updates also is not
included in these estimates. In addition, while these estimates only
accounted for a single cycle of an annual report, the NBR Rule requires
annual reporting for at least 10 years.\21\ In any event, the NBR Rule
acknowledges that the information collection requirements and other
impacts led to the designation of the rule as a ``major rule'' under
the Congressional Review Act.\22\
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\19\ See OIRA ICR Ref. No. 202407-3170-001 and Supporting
Statement, <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202407-3170-001">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202407-3170-001</a>.
\20\ 89 FR 56028 at 56137, 56148.
\21\ Sec. 1092.202(e).
\22\ Based on the impacts of the NBR Rule (including its
information collection requirements discussed above and its
publication provisions described further below), the Office of
Information and Regulatory Affairs designated the NBR Rule as a
``major rule'' as defined by 5 U.S.C. 804(2). 89 FR 56028 at 56150.
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Third, in Sec. 1092.205(a), the NBR Rule authorizes the Bureau to
make available to the public on its internet website information, other
than administrative information, that covered nonbanks submit to the
nonbank registry pursuant to the registration requirement described
above. Under Sec. 1092.205(b), the NBR Rule also authorizes the Bureau
to publish aggregate information collected pursuant to the registration
requirement as well as the annual reporting requirement described
above.\23\ While neither provision requires publication by the Bureau,
the NBR Rule stated that ``[t]he Bureau intends to publish this
information on its website and potentially in other forms.'' \24\ It
also stated that the Bureau was ``reserving the option not to publish
information based on operational considerations, such as resource
constraints.'' \25\
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\23\ Certain additional requirements and definitions apply to
the publication provisions, as elaborated in Sec. 1092.200 and
supplemented by subpart A of part 1092.
\24\ 89 FR 56028; see also id. at 56031 (describing how the
Bureau may publish the identity of the attesting executive).
\25\ Id. at 56041.
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In its statement submitted to the Office of Management and Budget
to support the collection of information established by the NBR Rule,
the Bureau estimated that the annual costs to the Federal government to
operate the registry would amount to ``$2.5 million for external vendor
support and 10,400 hours of Federal staff time.'' \26\ Of this amount,
the Bureau explained that approximately $1,900,000 would be needed
``for developer support to operate and maintain the data collection
system'' and $600,000 would be needed ``for an online user support
function (including technical writing support for user help
articles).'' \27\ In addition, the Bureau estimated that it would need
five full-time employees to support the registry, including by
``responding to respondents' substantive questions regarding rule
compliance, data intake and quality control, managing technical system
updates for mission critical needs, and overseeing external vendor
work.'' \28\
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\26\ Supporting Statement for Registry of Nonbank Covered
Persons Subject to Certain Agency and Court Orders, OMB Control
Number: 3170-0076 (July 9, 2024), at 10, <a href="https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202407-3170-001">https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202407-3170-001</a>.
\27\ Id.
\28\ Id.
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B. The Proposal To Rescind the NBR Rule
On May 14, 2025, the Bureau published a proposal to rescind the NBR
Rule (``Proposed Rescission Rule'').\29\ The Bureau stated it was
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 on to consumers, are not justified by the speculative and
unquantified benefits to consumers discussed in the analysis proffered
in the NBR Rule.'' \30\ It described the costs imposed on regulated
entities as a ``significant regulatory burden'' that was highlighted
not only by industry comments, but also by the Small Business
Administration's Office of Advocacy and the Conference of State Bank
Supervisors.
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\29\ 90 FR 20406 (May 14, 2025).
\30\ Id. at 20407.
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The Proposed Rescission Rule also stated the Bureau's belief that
the NBR Rule is not a necessary tool for monitoring and reducing risks
to consumers from bad actors. It further noted the role that multiple
other Federal and State agencies play in the enforcement of Federal
consumer financial laws.\31\
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\31\ Meanwhile, as it was considering the Proposed Rescission
Rule, the Bureau also announced on April 11, 2025, that ``it will
not prioritize enforcement or supervision actions with regard to
entities that do not satisfy future deadlines under'' the NBR Rule.
CFPB Offers Regulatory Relief from Registration Requirements for
Small Loan Providers (Apr. 11, 2025), <a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-offers-regulatory-relief-from-registration-requirements-for-small-loan-providers/">https://www.consumerfinance.gov/about-us/newsroom/cfpb-offers-regulatory-relief-from-registration-requirements-for-small-loan-providers/</a>.
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III. Consultation
In developing this final rule, the Bureau consulted with the Board
of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation (FDIC), the Office of the Comptroller of the
Currency (OCC), the National Credit Union Administration (NCUA), the
Federal Trade Commission (FTC), and the Farm Credit Administration
(FCA) on, among other things, consistency with any prudential, market,
or systemic objectives administered by such agencies.\32\ The Bureau
also consulted with State agencies, including State agencies involved
in supervision of nonbanks and State agencies charged with law
enforcement, as well as with Tribal governments.\33\
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\32\ See 12 U.S.C. 5512(b)(2)(B).
\33\ See 12 U.S.C. 5512(c)(7)(C), 5514(b)(7)(D); see also 12
U.S.C. 5481(27) (defining the term ``State'' as including ``any
federally recognized Indian tribe, as defined by the Secretary of
the Interior under'' 25 U.S.C. 5131(a)).
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IV. Legal Authority
The Bureau relied on its authority under the CFPA when it
voluntarily promulgated the NBR Rule. In light of its decision to
rescind the NBR Rule, the Bureau is issuing this final rule to revoke
the NBR Rule pursuant to that authority.
CFPA section 1022(b)(1) authorizes the Bureau to prescribe rules
``as may be necessary or appropriate to enable the Bureau to administer
and carry out the purposes and objectives of the Federal consumer
financial laws, and to prevent evasions thereof.'' \34\ CFPA section
1022(b)(2) prescribes certain standards for rulemaking that the Bureau
must follow in exercising its authority under section 1022(b)(1); these
standards are discussed in part XI below.
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\34\ 12 U.S.C. 5512(b)(1).
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The Bureau relied in part on CFPA section 1022(c)(1)-(4) and
1022(c)(7) to collect information and authorize publication of certain
information collected under the NBR Rule. CFPA section 1022(c)(1)-(4)
authorize the Bureau to prescribe rules to collect information from
covered persons for the purposes of monitoring for risks to consumers
in the offering or provision of consumer financial products or
services, and to publicly release information obtained pursuant to CFPA
section 1022, subject to specified limitations.\35\ CFPA section
1022(c)(7)(A) authorizes the Bureau to ``prescribe rules regarding
registration requirements applicable to a covered person, other than an
insured depository institution, insured credit
[[Page 48763]]
union, or related person.'' \36\ CFPA section 1022(c)(7)(B) provides
that, ``[s]ubject to rules prescribed by the Bureau, the Bureau may
publicly disclose registration information to facilitate the ability of
consumers to identify covered persons that are registered with the
Bureau.'' \37\
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\35\ 12 U.S.C. 5512(c)(1)-(4).
\36\ 12 U.S.C. 5512(c)(7)(A).
\37\ 12 U.S.C. 5512(c)(7)(B).
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Section 1024(b) of the CFPA authorizes the Bureau to exercise
supervisory authority over certain nonbank covered persons as defined
in CFPA section 1024(a)(1).\38\ Section 1024(b)(1) requires the Bureau
to periodically require reports and conduct examinations of persons
subject to its supervisory authority to assess compliance with Federal
consumer financial law, obtain information about the activities and
compliance systems or procedures of persons subject to its supervisory
authority, and detect and assess risks to consumers and to markets for
consumer financial products and services.\39\ Section 1024(b)(2)
requires that the Bureau exercise its supervisory authority over
nonbank covered persons under section 1024(b)(1) based on its
assessment of risks posed to consumers in the relevant product markets
and geographic markets, and taking into consideration, as applicable:
``(A) the asset size of the covered person; (B) the volume of
transactions involving consumer financial products or services in which
the covered person engages; (C) the risks to consumers created by the
provision of such consumer financial products or services; (D) the
extent to which such institutions are subject to oversight by State
authorities for consumer protection; and (E) any other factors that the
Bureau determines to be relevant to a class of covered persons.'' \40\
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\38\ 12 U.S.C. 5514.
\39\ 12 U.S.C. 5514(b)(1).
\40\ 12 U.S.C. 5514(b)(2).
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Section 1024(b)(7) of the CFPA identifies three independent sources
of Bureau rulemaking authority, on which the Bureau relied in
promulgating the NBR Rule. First, section 1024(b)(7)(A) requires the
Bureau to prescribe rules to facilitate the supervision of nonbank
covered persons subject to the Bureau's supervisory authority and
assessment and detection of risks to consumers.\41\ Second, section
1024(b)(7)(B) authorizes the Bureau to require nonbank covered persons
subject to its supervisory authority to ``generate, provide, or retain
records for the purposes of facilitating supervision of such persons
and assessing and detecting risks to consumers.'' \42\ Third, section
1024(b)(7)(C) authorizes the Bureau to prescribe rules regarding
nonbank covered persons subject to its supervisory authority ``to
ensure that such persons are legitimate entities and are able to
perform their obligations to consumers.'' \43\
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\41\ 12 U.S.C. 5514(b)(7)(A).
\42\ 12 U.S.C. 5514(b)(7)(B).
\43\ 12 U.S.C. 5514(b)(7)(C).
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V. General Comments on the Proposed Rescission Rule
A. General Comments Received on the Proposed Rescission Rule
The Bureau received a total of 16 comments on the Proposed
Rescission Rule, including 7 comments from 9 industry associations, a
comment from the SBA Office of Advocacy, a comment from an association
representing State financial regulators, 2 comments from nonprofit
consumer advocacy organizations, and 5 comments from individuals.
Comments pertaining to specific requirements or provisions of the NBR
Rule and to the NBR Rule's impacts are discussed in sections VI, VII,
VIII, X, and XI below.
Comments from the SBA Office of Advocacy, the State financial
regulator association, most industry associations, and some individuals
expressly supported rescission of the entire NBR Rule. As described
below, many of these comments asserted that the NBR Rule's registration
requirements for covered nonbanks subject to covered orders and
written-statement requirements for supervised registered entities were
duplicative, unnecessary, or significantly burdensome. They also
expressed similar views of the NBR Rule's authorization for the Bureau
to publish certain registration information. An individual commenter
expressed support for the proposed rescission but suggested that the
Bureau replace the NBR Rule with a rule mandating registration of
nonbanks with the Bureau's complaint portal.
The two nonprofit organizations and an individual commenter opposed
the Proposed Rescission Rule. One of the nonprofits stated that
nonbanks now provide a substantial share of consumer financial products
and services and pose heightened risks, including to consumers they
described as vulnerable to harm. According to this commenter, the NBR
Rule promotes transparency and enhances competition and consumer
choice, while rescission would limit regulatory oversight and result in
financial and informational costs to consumers. The other nonprofit
stated that the NBR Rule's registry will help regulators, consumer
advocates, and the public more broadly to identify repeat offenders and
patterns of misconduct, and that rescinding the rule would conceal
recidivism, which would grow as a result.
With respect to the NBR Rule's scope, a joint comment from banking
industry trade groups discussed those groups' previously raised
objections to the NBR Rule's inclusion of nonbank affiliates of insured
depository institutions and insured credit unions and to the rule's
written-statement requirements. A credit union trade association
objected to the rule's coverage of credit union service organizations
(CUSOs) and privately insured credit unions, stating that these
organizations have been effectively regulated by State credit union
authorities and the National Credit Union Administration, respectively.
Another industry association asserted that the NBR Rule's application
to consent orders that were entered into prior to the rule's
promulgation imposes unfair burdens on entities that agreed to such
orders without knowing of potential exposure to penalties for failing
to comply with the registration requirements, that doing so would
expose them to the written-statement requirements (including potential
penalties for failure to comply or submitting a false attestation), and
the reputational impact of publication.
Some industry commenters questioned the Bureau's legal authority to
issue the NBR Rule and whether the NBR Rule is consistent with
provisions of the CFPA. Others suggested the NBR Rule intrudes on State
supervisory and enforcement authority. In contrast, a nonprofit
commenter stated that the NBR Rule was an appropriate use of the
Bureau's legal authority.
A. Response to General Comments
The Bureau agrees with commenters who supported rescission of the
NBR Rule because its various features are duplicative, unnecessary, or
significantly burdensome. As stated in the Proposed Rescission Rule,
and as explained in the analysis below, the Bureau does not believe the
speculative and unquantified benefits to consumers and the public that
were proffered in the NBR Rule justify the costs the rule imposes on
regulated entities.\44\
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\44\ The Bureau notes that concerns raised by commenters with
respect to particular applications of the NBR Rule or questioning
the legal authority underlying aspects of the NBR Rule are fully
addressed by rescission, and no further response is needed.
---------------------------------------------------------------------------
The Bureau disagrees with commenters who opposed rescission of the
NBR Rule on the basis of its
[[Page 48764]]
supposed value to consumers and the public. Commenters provided no
quantifiable support for the claim that the NBR Rule promotes or
enhances transparency, competition, and consumer choice. As discussed
below, any such benefits are speculative and likely minimal, as the
rule concerns orders that are already publicly available and, as the
Bureau acknowledged in the NBR Rule, consumers are unlikely to use the
registry as a comparison-shopping tool. With respect to commenters who
stated that rescission of the NBR Rule would result in a concealment of
recidivism and thus cause recidivism to increase, recidivism is not
hidden from enforcement agencies or the public because the orders that
are required to be registered under the NBR Rule are already public.
The Bureau further notes that no commenters responded to the Proposed
Rescission Rule's request for ``non-speculative and methodologically
rigorous analysis of the purported benefits and costs that were
identified when the [NBR Rule] was promulgated,'' \45\ including
analysis to support the view that recidivism is a significant problem
or that the registry created by the NBR Rule would address it, or that
rescission would limit regulatory oversight and result in financial and
informational costs to consumers.
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\45\ 90 FR 20406 at 20407.
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B. Final Rule
For reasons explained above and below, the Bureau is finalizing its
rescission of the NBR Rule, 12 CFR 1092, as proposed. As stated in the
proposal, the Bureau is concerned that the costs the NBR Rule imposes
on regulated entities, and that may be passed on to consumers, are not
justified by the speculative and unquantified benefits to consumers
discussed in the NBR Rule's analysis. Despite specifically seeking
input from commenters pertaining to non-speculative and
methodologically rigorous analysis of the NBR Rule's purported
benefits, the Bureau received none. Accordingly, and because the Bureau
concludes that the NBR Rule is not necessary as a tool to effectively
monitor and reduce potential risks to consumers from bad actors, the
Bureau is finalizing the rescission in its entirety.
Below, the Bureau analyzes the three key components of the NBR Rule
codified at 12 CFR 1092.202-205, and the reasons for this rescission.
Because the Bureau is finalizing rescission of all key components of
the NBR Rule, it likewise is finalizing rescission of subpart A of
Sec. 1092, Sec. Sec. 1092.200-201 and 206 of subpart B, and appendix
A to Sec. 1092, which are rendered inapplicable.\46\
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\46\ Subpart A of Sec. 1092 contains general provisions
relating to legal authority, general definitions, submission and use
of registration information, and severability that apply generally
to the Bureau's nonbank registration program. Sections 1092.200-201
and 206 of subpart B contain provisions relating to the scope and
purpose, definitions, and phased implementation dates specific to
the NBR Rule. Appendix A to Sec. 1092 contains a list of State laws
that fall under the definition of ``covered law'' in Sec.
1092.201(c).
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VI. Rescission of Registration Requirements
A. Comments Received
Multiple commenters supported the proposed rescission of the NBR
Rule's registration requirements because, in their view, these
requirements are unnecessary for several reasons.
One industry association stated that the NBR Rule's estimate of the
number of covered nonbanks with covered orders lacked a foundation,
thereby undermining the premise that there is a recidivism problem to
solve, and further stated that requiring registration of an order by a
company with one offense does not address recidivism. The same
commenter further observed that, in its view, the NBR Rule does not
actually address recidivism because orders that involve no admission or
denial of liability often do not reflect wrongdoing or address actual
harm, such that there is no ``offense'' to repeat. A mortgage industry
association stated that, while it agreed that deterring recidivism is
an important goal, it was unclear how the NBR Rule serves that goal by
simply centralizing information about orders that are already public.
Similarly, multiple industry commenters stated that existing
supervisory and enforcement mechanisms adequately monitor for repeat
offenders such that the Bureau's registry is not needed for this
purpose.
One of these commenters, a private insurer of State-chartered
credit unions, noted that the credit unions it insures are subject to
comprehensive supervision not only by their State regulators but also
by the commenter's risk monitoring and examination program, such that a
Federal registry would not enhance supervision but instead would divert
resources from member service and operational resilience. In addition,
several industry commenters and an individual commenter posited that
the registry is unnecessary as it is duplicative of the Nationwide
Multistate Licensing System & Registry (NMLS), as well as other
databases and public sources, such as State and Federal regulator
websites and legal and regulatory databases, which already collect
information pertaining to relevant orders.\47\ One of these commenters
suggested that the Bureau could gather data on its own instead of
creating a new reporting requirement, to the extent the Bureau views
consolidation of information as essential. As to whether a gap exists
between what is reported on NMLS and any other orders subject to
registration under the NBR Rule, one commenter stated that any such gap
appears to relate to the Bureau's own orders or to the lack of
reporting on some industry sectors in NMLS, and described the lack of
centralization of such information as a ``weak rationale'' for
maintaining the Bureau's registry. One industry commenter noted that
nonbanks are required to hold State licenses for which they apply
through NMLS, and that as part of the application process, companies
must submit an MU1 Form that requires disclosure of whether, in the
past ten years, any State or Federal regulatory agency found the entity
or a control affiliate to have been involved in a violation of a
financial services-related regulation or statute or entered an order
against the entity or a control affiliate in connection with a
financial services-related activity, among other items. These companies
also must provide an explanation and copy of any such order, and other
State regulators are notified of the action. An association
representing State financial regulators stated that the NBR Rule
creates a costly reporting, registration, and compliance regime that
warrants rescission in light of its duplicative nature. And an industry
commenter and an individual suggested that the covered order
registration requirements would negatively impact the incentive for
firms to enter into settlements and otherwise cooperate with
regulators.
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\47\ A mortgage industry association commented that this
duplication is not in keeping with the Bureau's obligation in CFPA
section 1024(b)(2)(D), 12 U.S.C. 5514(b)(2)(D), to require reports
from supervised nonbanks while taking into account ``the extent to
which such institutions are subject to oversight by State
authorities for consumer protection.''
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Two nonprofit consumer advocacy groups opposed the proposed
rescission of the registration requirements. These commenters stated
that NBR Rule registry centralizes public information regarding
violations related to Federal consumer financial law that is highly
decentralized, including across agency and court orders. In their view,
the registry uniquely centralizes
[[Page 48765]]
information, which addresses a nonbank recidivism problem by enhancing
the Bureau's risk-based prioritization of examinations and
investigations, as well as its ability to spot emerging risks early.
One of the commenters cited examples of repeat offenses against
military families and older adults by nonbank mortgage and reverse
mortgage lenders, respectively, and stated that a central repository of
public orders can reveal broader patterns and risks associated with
enforcement gaps in the financial marketplace.
B. Response to Comments
The Bureau agrees with commenters who stated that the NBR Rule did
not establish the existence of a widespread problem of recidivism. The
Bureau did not study the issue, and when State regulators jointly
raised in commenting on the proposed registration rule that recidivism
was not a major problem that merited the development of a new Federal
registry, the Bureau simply responded that they had not proven that
recidivism was not a problem.\48\ Moreover, the Bureau agrees with
commenters that the registration requirements do not actually address
recidivism as they are overbroad in scope. The NBR Rule requires
covered nonbanks with even just one covered order to register with the
Bureau, largely belying the notion that the registry's focus is on
identifying trends related to recidivism. The rule also requires
registration of a wide range of orders for which nonbank liability is
not uniformly established, and the underlying violations can vary
drastically in degree of seriousness. This overbreadth and lack of
precision creates burdens that far exceed those presented by
alternative tools that the Bureau has for detecting and addressing any
recidivism. For example, the Bureau may conduct risk-based follow-up
examinations to assess compliance with orders that impose obligations
under Federal consumer financial law, as well as investigations of
credible allegations or indications of tangible consumer harm from
potential violations of such orders.
---------------------------------------------------------------------------
\48\ 89 FR 56028 at 56062.
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Consequently, the Bureau disagrees with commenters who stated that
the centralization of public information resulting from the NBR Rule's
registration requirements addresses a recidivism problem among nonbanks
because, as discussed above, neither commenters nor the NBR Rule
presented evidence that such a problem exists, or if it does, that it
presents greater risks to consumers as compared to other issues that
fall under the Bureau's traditional focus on risk-based supervision or
enforcement activities. It bears noting that, although one of these
commenters identified examples of repeat offenses, it did so without
the aid of a centralized registry of public orders, which underscores
the availability of this information without the NBR Rule's imposed
collection requirements.
The Bureau agrees with commenters who stated that the registration
system created by the NBR Rule is largely duplicative of existing
reporting and data collection mechanisms, including NMLS. In fact, the
Bureau acknowledged as much in the NBR Rule in creating a one-time
registration option for NMLS-published covered orders (defined to
exclude orders that had been issued or obtained in whole or in part by
the Bureau) that excepted from the rule's full and ongoing registration
(and written-statement) requirements a substantial number of the orders
that it originally proposed to cover. Yet even with respect to that
option, it still required duplicative registration of information
pertaining to the order with the Bureau when that information had
already been filed with the NMLS.
C. Final Rule
The Bureau is finalizing its rescission of the NBR Rule's
registration requirements at Sec. Sec. 1092.202 and 1092.203 as
proposed.
The NBR Rule's registration requirements were premised on a
purported need for the Bureau to track the prevalence of covered orders
issued against covered nonbanks, including for the purpose of
addressing risk to consumers that arises from recidivism. For example,
in its Background section in part II.A, the NBR Rule explained how
nonbank providers of consumer financial products and services generally
are subject to Federal consumer financial laws that the Bureau
enforces, including, among others, the CFPA prohibition against unfair,
deceptive, or abusive acts or practices (UDAAPs), which overlaps with
similar prohibitions enforced by other Federal and State regulators.
The NBR Rule then stated that the Bureau had brought nearly 350
enforcement actions against nonbanks since passage of the CFPA.
However, the NBR Rule provided no data on the prevalence of public
agency and court orders against covered nonbanks, and only vague,
limited information about the prevalence of recidivism.\49\ For
example, the NBR Rule did not state how many of the nearly 350 Bureau
enforcement actions had resulted in orders imposing obligations on
nonbanks for violation of Federal consumer financial law. Further, the
NBR Rule did not disclose or estimate how many such orders had been
violated. Instead, in the NBR Rule's single paragraph describing the
number of Bureau enforcement actions, the NBR Rule asserted that ``[o]n
numerous occasions'' the Bureau had ``uncovered companies that failed
to comply with consent orders that the companies entered into with the
Bureau voluntarily.'' \50\ However, as the only support for that claim,
the NBR Rule merely cited five Bureau enforcement actions against
nonbanks operating in certain markets for consumer financial products
and services and one against a bank.\51\ Similarly, while noting that
the Bureau highlights its supervisory work in a publication called
Supervisory Highlights, the NBR Rule did not quantify instances of
consent order violations published there.\52\ The NBR Rule
acknowledged, however, that the Bureau's existing supervisory processes
for follow-up examinations of entities subject to consent orders is
``designed to stop recidivist behavior.'' \53\
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\49\ While stating that it did not purport to define the term
``repeat offender,'' 89 FR 56028 at 56127 n.443, the NBR Rule
described ``[r]ecidivism'' as occurring ``in the form of a company
that repeatedly violates the law and as a result becomes subject to
multiple orders, or in the form of a company that violates the
orders to which it is subject.'' Id. at 56035.
\50\ Id. at 56028-29.
\51\ Id. at n.7.
\52\ Id. at n.35 & 56125.
\53\ Id. at 56030-31 (describing 2022 creation of ``Repeat
Offender Unit'' but not providing any data about the extent to which
it has identified recidivism in the many months prior to the
issuance of the NBR Rule).
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In addition, the NBR Rule did not provide any data about similar
orders issued by other Federal or State agencies. Based on the record,
including this limited data, the Bureau did not conclude that
recidivism by nonbank covered persons was widespread or that the risks
it poses are notably greater than other risks to an extent that would
justify the costs imposed by the NBR Rule. Indeed, in response to
comments received on the proposal for the NBR Rule questioning the
Bureau's stance that recidivism poses particular risks to consumers,
the Bureau stated its belief that ``adoption of the final rule is
appropriate even if recidivism among nonbanks currently presents only
limited risks to consumers,'' as ``even one covered order may be
probative of significant risk to consumers.'' \54\ But this statement
likewise failed to address whether it is appropriate to impose a
[[Page 48766]]
registration burden on entities in light of the speculative nature of
the benefits provided by access to information about orders that are
already publicly available. Even assuming arguendo that the existence
of a single order is probative of consumer risk, the Bureau is capable
of monitoring for this risk without a registry. At the same time, the
NBR Rule acknowledged that a joint comment letter from State regulators
``stated that States have not witnessed widespread issues with or a
growing trend of recidivism among nonbanks[.]'' \55\ And while the NBR
Rule noted that consumer advocate commenters stated that ``recidivism
by nonbanks did pose risks to consumers,'' it did not describe those
comments as indicating the prevalence or severity of recidivism.\56\
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\54\ 89 FR 56028 at 56062.
\55\ Id. at 56060. The NBR Rule also noted that consumer
advocate commenters stated that ``recidivism by nonbanks did pose
risks to consumers'' but did not describe those comments as
indicating the prevalence or severity of recidivism.
\56\ Id.
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The NBR Rule's lack of establishment of recidivism as a pressing
issue resulted in the rule's findings regarding the necessity and value
of its registration requirements being based on speculative and
unquantified benefits, which do not justify the costs the NBR Rule
imposes on regulated entities. As described in the background in part
II.A above, the Bureau repeatedly indicated that a primary goal of the
NBR Rule was to address risks to consumers associated with corporate
recidivism. However, the Bureau did not provide data to support or
justify the assertion that recidivism poses risks warranting the
registry it created.
Indeed, on its face, the notion that the types of recidivism
considered in the NBR Rule categorically pose risks to consumers that
warrants the creation of a registry of this kind is at best
questionable. For example, under the NBR Rule's broad concept of
recidivism,\57\ a company that allegedly violates any single provision
of Federal consumer financial law more than once and resolves that
allegation concurrently through orders with multiple regulators is
considered as posing registration-worthy recidivism-related risks, even
though the matter may not involve significant consumer harm or
``repeating'' of a previous offense at all. Or, a small entity that
settles matters related to disparate violations of minor, technical
provisions for small amounts in two or three states over a period of
years is deemed to pose risk to consumers warranting registration
despite seeming to pose no greater risk--and in fact seeming to pose
less risk--than an entity implicated in a single significant nationwide
action that impacted a large number of consumers. Or, a large entity
that agrees to a consent order to resolve a single significant matter
would be treated as posing registration-worthy recidivism-related risk,
even if it demonstrated order compliance and was not found to have
violated any other law again. In fact, such an entity may pose less
risk with respect to the conduct at issue than other entities whose
similar conduct has gone undetected or unresolved by order. The
Bureau's reasoning that imposing the NBR Rule's registration
requirements on covered nonbanks with respect to all covered orders is
the ``most effective and efficient mechanism for collecting this
information'' was thus based on the unsubstantiated premise that
recidivism or risks related to recidivism pose a pressing threat to
consumers, and did not adequately consider the availability of other
sources of information.\58\ Indeed, the Bureau acknowledged this lack
of an established basis when it stated in the NPRM for the NBR Rule
that the monitoring for covered orders that would result from the
registration requirements would allow the Bureau ``to track specific
instances of, and more general developments regarding, potential
corporate recidivism.'' \59\
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\57\ 89 FR 56028 at 56128 n.443 (describing repeat violations
with multiple orders, as well as violation of past orders, as
indicia of ``recidivism'').
\58\ Id. at 56101.
\59\ 88 FR 6088, 6092 (Jan. 30, 2023) (emphasis added).
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In addition, the Bureau is finalizing the rescission of the NBR
Rule's registration requirements because it concludes that these
requirements are not necessary to fulfill its market monitoring and
supervisory functions. The Bureau clearly can track its own orders and
can easily track any other Federal regulatory orders. With respect to
other orders, as noted above, in response to comments from State
regulators and industry criticizing the burdensome and duplicative
regime it had proposed, the Bureau in the NBR Rule finalized a system
providing a one-time registration alternative for NMLS-published
covered orders. The Bureau had not sought public comment on this
alternative approach, which it recognized remained nonetheless
duplicative to a large degree because the Bureau itself would use the
existing State registry system to obtain information for such
orders.\60\ The Bureau has access to the NMLS and can directly access
these orders without requiring those entities subject to them to submit
them to the Bureau. Yet the Bureau did not consider whether to simply
exclude NMLS-published orders entirely. Thus, the Bureau did not
establish why Bureau registration of entities with NMLS-published
covered orders was even necessary.
---------------------------------------------------------------------------
\60\ 89 FR 56028 at 56088 (with regard to NMLS-published covered
orders, ``the Bureau can use any information available through the
NMLS to help inform its risk-based supervisory prioritization
determinations'').
---------------------------------------------------------------------------
Relatedly, the NBR Rule's findings that registration is necessary
to effectively monitor for and reduce potential risks to consumers from
bad actors largely ignored the enforcement role played by multiple
Federal and State agencies that monitor for compliance with their own
orders, which contributes to an enforcement environment in which such
risks are already mitigated. This is no less true for Bureau-issued
orders, which the Bureau has long monitored for compliance without a
registry. Accordingly, the NBR Rule's findings that registration is
necessary to detect and assess risks to consumers and to facilitate
Bureau supervision likewise are infirm. Because the registry was
designed in large part to collect information regarding the Bureau's
own orders and other Federal regulatory orders, both of which the
Bureau can easily track, and information about NMLS-published covered
orders, to which the Bureau already has access, the Bureau does not
believe that the assumed benefits of the registry are justified in
light of its costs and burdens.
The Bureau also is finalizing its rescission of the NBR Rule's
registration requirements based on its conclusion that the rule's
speculative and unquantified benefits do not justify the cost to the
Bureau of maintaining the NBR system. As noted in section II above, the
Bureau estimated that the annual costs to the Federal government to
operate the registry would amount to ``$2.5 million for external vendor
support and 10,400 hours of Federal staff time.'' \61\ Consistent with
its statement in the proposal, the Bureau does not believe the NBR Rule
is a necessary tool to effectively monitor and reduce potential risks
to consumers. Subsequent developments, including Congress's reduction
of the Bureau's
[[Page 48767]]
statutory budget cap,\62\ underscore that the NBR Rule's costs are
unjustified. The Bureau already has access to information about public
orders as described above and already accounts for such information
when carrying out its objectives, including, as noted above, through is
risk-based supervisory prioritization, its examination process, its
enforcement process, and its market monitoring processes.
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\61\ Supporting Statement for Registry of Nonbank Covered
Persons Subject to Certain Agency and Court Orders, OMB Control
Number: 3170-0076 (July 9, 2024), at 10, <a href="https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202407-3170-001">https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202407-3170-001</a>.
\62\ Public Law 119-21, sec. 30001, 139 Stat. 72, 126 (2025).
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VII. Rescission of Written Statement Requirements
A. Comments Received
Several commenters supported the proposed rescission of the NBR
Rule's written-statement requirements because, in their view, these
requirements are significantly burdensome and harmful.
One industry association commented that these requirements create
legal exposure for supervised nonbanks that diverts their resources
from productive uses. Multiple industry groups stated that the
requirements expose attesting executives to liability, thereby creating
a chilling effect that deters compliance professionals from serving in
compliance roles with supervised nonbanks. One of these commenters
expressed concern that the NBR Rule's policy of not publishing written
statements could change, or that the NBR system could experience a data
breach. Another stated that the requirement for executives to attest
regarding compliance conflicts with established corporate compliance
structures.
An industry association representing credit unions asserted that
the written-statement requirements create a long-term burden that
exceeds the burdens imposed by the orders themselves. An association
representing State financial regulators expressed concern about the
attestation requirement's application to State orders in particular,
which it stated amounted to an unlawful encroachment by the Bureau on
State authority.
On the other hand, both nonprofit commenters opposed rescission of
the written-statement requirements. One of these commenters stated that
the requirements help to prevent repeat issues by holding executive
leadership accountable for order compliance, thereby creating pressure
to take legal obligations seriously and driving cultural change in
companies.
B. Response to Comments
The Bureau agrees with those commenters who noted that the written-
statement requirements create legal exposure for supervised nonbanks
and exposure to potential liability for attesting executives. Even if
the Bureau were unlikely to pursue enforcement actions against
supervised nonbanks or attesting executives for a lack of adequate
compliance with these requirements, it is reasonable to expect that the
possibility of such actions would be sufficient to generate
apprehension among these entities and individuals. For example, in the
final NBR Rule itself, the Bureau highlighted how the ``potential for
criminal liability'' for false statements under 18 U.S.C. 1001 attached
to the required signature of the written statement, and how such a risk
would influence attesting executives.\63\ In turn, these effects could
hinder the ability of supervised nonbanks to recruit and retain
compliance professionals, which could result in an increase in risks to
consumers.
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\63\ 89 FR 56028 at 56114 (also noting how some commenters
called for the Bureau to ``unambiguously articulate . . . the
potential liability and intent standards''); see also id. at 56116
(noting how 18 U.S.C. 1001 ``provides incentives'' in regard to the
written statement requirement). In light of such potential liability
and how the NBR Rule did not provide the articulation commenters
requested, maintaining the NBR Rule may be incompatible with the
policy of the United States that ``[a]gencies promulgating
regulations potentially subject to criminal enforcement should
explicitly describe the conduct subject to criminal enforcement, the
authorizing statutes, and the mens rea standard applicable to those
offenses.'' E.O. 14294, ``Fighting Overcriminalization in Federal
Regulations'' (May 9, 2025), sec. 2(d), 90 FR 20363 (May 14, 2025).
See also Guidance on Referrals for Potential Criminal Enforcement,
90 FR 27530, 27531 (June 27, 2025) (Bureau policy statement
explaining that, ``when formulating the regulatory text of Bureau
NPRMs and final rules with criminal consequences that are published
in the Federal Register, the Bureau intends to explicitly state a
mens rea requirement for each element of a criminal regulatory
offense, accompanied by citations to the relevant provisions of the
authorizing statute.'').
---------------------------------------------------------------------------
As noted above, the commenters that opposed rescission of the
written-statement requirements cited the requirements' supposed
beneficial effects with respect to reducing the likelihood of repeat
offenses by nonbanks subject to the requirements. As with other aspects
of the NBR Rule, this position is based on an unfounded premise that
recidivism is a sufficiently widespread problem that exposes consumers
to an amount of risk that warrants establishing the registry. As noted
elsewhere, neither commenters nor the NBR Rule presented evidence that
a recidivism problem exists, whether in consumer finance markets
generally or with respect to nonbanks operating in Bureau-supervised
markets, much less to an extent that would justify the costs imposed by
the NBR Rule. In any case, the government agencies that issue or obtain
orders can include obligations that executive leadership must satisfy,
and that may create liability for executive leadership in the event of
their noncompliance. As such, it is unclear how adding an attestation
requirement to such obligations would result in any material increase
in a firm's likelihood of taking its legal obligations seriously.
C. Final Rule
The Bureau is finalizing its rescission of the NBR Rule's written-
statement requirements at Sec. 1092.204 as proposed.
As was the case with other key components of the NBR Rule, the
Bureau's findings regarding the necessity and value of the rule's
written-statement requirements were based on speculative and
unquantified benefits that do not justify the costs the NBR Rule
imposes on regulated entities. Undergirding these findings was the
unfounded belief that these requirements would help to address and
prevent recidivism, which the Bureau did not establish posed risks to
consumers to a degree that warranted the requirements' adoption.
The NBR Rule concluded that ``the requirements imposed by the final
rule's written-statement requirements will impose only modest costs on
entities beyond the costs entities are already incurring to ensure
compliance with covered orders,'' \64\ and implied that attesting
executives would be reluctant to serve in such capacities only at
supervised nonbanks that lack adequate compliance systems or do not
endeavor in good faith to comply with orders.\65\ However, this
analysis did not adequately consider the possibility that compliance
professionals may not be able to easily discern how scrupulous an
entity is before taking on such a role, that some compliance
professionals may not be willing to risk their reputations or expose
themselves to liability even in exchange for a salary premium, why a
registry is needed at all if so many firms are already complying with
their orders in good faith, or the effect that prior similar
requirements (e.g., certifications of accuracy of financial reports
required under the Sarbanes-Oxley Act of 2002) \66\ may have had on
recruitment. Furthermore, the Bureau's statements that written
attestations would facilitate its supervision efforts, including by
detecting and assessing risks to consumers, are difficult to reconcile
with its own acknowledgment that most
[[Page 48768]]
firms endeavor in good faith to comply with covered orders. These
analytical shortcomings counsel strongly in favor of rescinding the
written-statement requirements.
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\64\ 89 FR 56028 at 56111.
\65\ Id. at 56148.
\66\ Public Law 107-204, 116 Stat. 745 (2002).
---------------------------------------------------------------------------
Moreover, the Bureau believes that, as a policy matter, the
imposition of the written-statement requirements amounted to regulatory
overreach. Supervised nonbanks already are subject to monitoring of
compliance with orders by the State or Federal regulator that is
charged with such action by the corresponding legislature. In fact,
when a joint letter by State regulators objected to the written-
statement requirements, arguing that they would frustrate and interfere
with existing monitoring regimes, the Bureau excepted entities with
State-issued covered orders published on NMLS from the written-
statement requirements, and acknowledged that it could obtain
information through memoranda of understanding and other means related
to such entities' compliance. Yet the Bureau did not explain why, when
other Federal regulators' orders similarly are readily available on
their websites and the Bureau has information sharing agreements with
those regulators, it could not take the same approach with them to
prevent interfering with or frustrating their compliance monitoring.
Indeed, in its supervisory and enforcement functions, the Bureau has
long coordinated its work with other Federal regulators regarding their
monitoring of orders they have imposed on supervised nonbanks related
to Federal consumer financial law compliance. By requiring the
submission of these written statements to the Bureau, where the Bureau
itself has taken no action against the entity, the Bureau overstepped
its regulatory role by imposing a monitoring tool on firms that are
already subject to the applicable compliance regime enforced by their
regulators. The Bureau has no interest in usurping the authority of
other regulators in this manner.
VIII. Rescission of Publication Provisions
A. Comments Received
Several commenters supported the proposed rescission of the NBR
Rule's authorization for the Bureau to publish registration information
because, in their view, publication is unnecessary and burdensome for a
variety of reasons.
Multiple industry associations and an association representing
State regulators stated that company information and orders are already
publicly available, including through NMLS, State and Federal agencies,
the Better Business Bureau, and other sources. One of these commenters
stated that, instead of publishing registration information that is
already public, the Bureau could simply provide a link to the relevant
information on the NMLS website or create a web portal of centralized
information based on the Bureau's own data gathering that is not
reliant on a reporting requirement. A mortgage industry association
suggested that, to the extent company information and orders are not in
NMLS, the Bureau could add them to NMLS. The same commenter stated that
publicizing the information is unnecessary to help enforcement agencies
because the orders themselves already generally provide for compliance
monitoring.
Multiple industry commenters and an individual commenter stated
that publication would create confusion and undue reputational harm to
registrants, in part due to the inclusion of consent orders, which
often contain no findings or admissions of wrongdoing and thus would
be, in these commenters' view, indistinguishable from litigated cases
or judgments. Two industry commenters likewise expressed concern that
the Bureau would publicize ``unreliable'' registration information that
is not indicative of misconduct or violations. In a similar vein, a
credit union industry association stated that the registry would be
overwhelmed with minor infractions. A mortgage industry association
stated that the public identification of senior executives by name will
make compliance recruiting difficult.
The two nonprofit commenters opposed the proposed rescission of the
NBR Rule's authorization of publication because, in their view,
publication would enhance deterrence of conduct that would lead to
orders that are published, would enable less fragmented fact gathering
and thus more efficient risk-based oversight by other regulators, and
would provide a one-stop source of information for consumers and the
public. These commenters stated that withdrawing the plan for a public
registry would limit oversight, consumer shopping, choice, and
competitiveness by making it harder for other regulators, consumers,
and the public to identify recidivism and other patterns of misconduct
by nonbanks. One of these commenters stated that a public registry is
needed to help States pursue enforcement by identifying patterns and
practices of misconduct in a context where the Bureau, in the
commenter's view, is deemphasizing enforcement. These commenters also
stated that it is unrealistic for consumers to conduct piecemeal
research on all of the sources of information that a public Bureau
registry would centralize.
B. Response to Comments
The Bureau agrees with commenters who noted that the information
the NBR Rule authorizes for publication is already publicly available,
which greatly limits the utility of Bureau publication of such
information. The Bureau also agrees with commenters who stated that the
mix of types of orders that would be subject to publication--including
litigated judgments, consent orders, settlements involving no admission
of liability, orders for which supervised nonbanks have submitted
written statements affirming steps taken to review and oversee
activities subject to the orders, or for which the Bureau or other
regulators have found substantial compliance, and others--and the wide
range of covered laws and scope and severity of harm implicated by such
orders renders the value of publication to consumers and the public
questionable at best. It is unlikely that consumers would be able to
distinguish between orders that relate to actual instances of serious
misconduct and those that relate to more benign (or disputed)
violations, or to distinguish between orders that are truly indicative
of significant harmful recidivism or recidivism-related risk. This lack
of understanding could paint covered nonbanks subject to a variety of
orders of varying degrees of seriousness and established liability with
a broad brush as ``recidivists'' or ``repeat offenders'' and result in
reputational impacts that put them at a competitive disadvantage.
The Bureau disagrees with commenters that opposed the rescission of
the NBR Rule's authorization of publication based on an expectation
that publication would enhance deterrence of conduct that would lead to
the issuance of orders that are published. As a threshold matter, the
mechanisms that operate to make covered orders public in the first
instance did not prevent them from coming into existence. Regardless,
these commenters provided no evidence to support their stated
expectation that the Bureau's (re)publication of such orders would do
so. And in any case, the potential for deterrence is not relevant
inasmuch as the NBR Rule authorized publication of covered orders
entered into prior to the NBR Rule's effective date, including
[[Page 48769]]
well before the Bureau even proposed the NBR Rule.\67\
---------------------------------------------------------------------------
\67\ See 12 CFR 1092.201(e)(5) (defining ``covered order'' to
include those orders that, among other criteria, have ``an effective
date on or later than January 1, 2017'').
---------------------------------------------------------------------------
Commenters opposed to rescission of the publication provisions also
did not provide evidence to support the suggestion that publication
would lead to efficiencies for other regulators, consumers, and the
public. Indeed, the association representing State regulators supported
rescission of the NBR Rule in its entirety based in large part on the
rule's publication provisions resulting in duplication of publicly
accessible information. In regard to consumer benefit, there is little
if any indication that individual consumers would understand the
complexities of the Bureau's NBR system and how it interrelates with
the NMLS system. While the Bureau in the NBR Rule discussed potential
benefits of publication beyond direct benefit to consumers, it nowhere
established or even analyzed how useful comparatively a centralized
database would be, for example, to researchers who already have access
to NMLS Consumer Access, other State registries, and the websites of
Federal regulators from which they can draw information, not to mention
search engines and other evolving and extremely powerful research
tools. Further, such researchers may continue to use those sources
anyway, given that NMLS and other regulators' websites include more
regulatory orders than the set of covered orders that the NBR Rule
authorized the Bureau to publish on the Bureau's website.
C. Final Rule
The Bureau is finalizing its rescission of the NBR Rule's
publication provisions at Sec. 1092.205 as proposed.
In promulgating the NBR Rule, the Bureau maintained that the rule,
including its planned publication of information submitted to the
registry, would benefit consumers and the wider public. However, as
noted above in response to comments, it is unlikely that consumers
would find the registry useful, including as a tool to comparison-shop
among providers of consumer financial products and services. Indeed,
the Bureau acknowledged in the NBR Rule that it did ``not necessarily
expect a wide group of consumers to rely routinely on the Bureau's
registry when selecting consumer financial products or services,'' \68\
thereby undermining the supposed benefits of the NBR Rule. Moreover,
the Bureau stated its belief that most consumers would not change their
behavior given that more direct and timely information (for example,
loan disclosures provided during origination) has been found to be more
impactful on consumer behavior than simply centralized publicly
available information.\69\ At the same time, the NBR Rule did not
consider or explain how the Bureau planned to publicly present the
information collected, much less test whether or how any form of
publication could be beneficial.
---------------------------------------------------------------------------
\68\ 89 FR 56028 at 56042.
\69\ Id. at 56141.
---------------------------------------------------------------------------
Moreover, in the NBR Rule, the Bureau stated its plan to publish
information submitted to the registry only on a discretionary basis,
which underscores the speculative nature of the benefits of provisions
in the NBR Rule authorizing such publication and touted by commenters
opposed to rescission. The NBR Rule does not require the Bureau to
publish the information, so by necessity, any benefits attached to the
authorization to publish are purely theoretical, since the NBR Rule did
not provide any guarantee that publication would occur.
By contrast, while the potential for publication may not provide
actual benefits, the threat of publication does impose actual costs. As
discussed above, even the threat of publicly identifying an attesting
executive may affect recruiting and retention of compliance
professionals.
In addition, the NBR Rule's discussion of costs that attach to any
publication that does occur also was deficient. The Bureau stated in a
rather conclusory manner that the ``potential publication of
information related to consent orders . . . will not impose unfair
costs on consenting entities.'' \70\ While the Bureau might have hoped
that such costs would not be unfair, it provided scant support for this
belief; the Bureau merely repeated that the information that would be
published would be factual public information, but did not suggest the
Bureau had seriously considered how it may present such information
publicly in a registry it characterized as for ``repeat offenders'' and
``recidivists,'' much less account for the fact that the NBR Rule made
all covered orders eligible for publication even though they reflect
varying degrees of liability and types of violations. The more relevant
inquiry relates to the costs of the entire publication regime. The NBR
Rule also found that the ``publication provisions of the rule will
impose only minor costs on affected entities resulting from changes in
consumer behavior.'' \71\ The Bureau believes that even if these costs
were only minor, they are not justifiable in light of the overall costs
of the NBR Rule.
---------------------------------------------------------------------------
\70\ Id. at 56068.
\71\ Id. at 56131.
---------------------------------------------------------------------------
The Bureau notes that publication is possible only to the extent
that the other costs of registration are borne by the Bureau. It is
therefore necessary and appropriate to consider the entirety of these
costs in weighing against any benefit of publication. As stated above,
the Bureau estimated that annual costs to maintain the NBR system--
including publication of information submitted to the registry--would
be on the order of $2.5 million dollars and over 10,000 hours of Bureau
staff time. In light of the Bureau's conclusion that the NBR Rule,
including its publication provisions, is not necessary to monitor for
or detect and assess risk to consumers or to facilitate the Bureau's
supervisory functions, these costs are unjustified, especially when
considered alongside the speculative and unquantified benefits of
publication.
IX. Alternatives Considered
In finalizing its rescission of the NBR Rule, the Bureau has
considered several possible alternatives. In each instance, the Bureau
has concluded that only full rescission of the NBR Rule is appropriate
at this time.
A. Partial Rescission
One potential alternative to full rescission of the NBR Rule is a
partial rescission of certain of the rule's requirements or provisions.
A partial rescission could take several forms.
The Bureau could rescind only the NBR Rule's written-statement
requirements or its publication provisions, leaving in place the
registration requirements.\72\ Rescinding the written-statement
requirements would have relieved the burdens those requirements place
on supervised registered entities, including, among others, the direct
labor costs associated with annual submission of written statements and
costs associated with negative effects on recruiting and retention of
compliance professionals. Rescinding the Bureau's authorization to
publish registration information would relieve the burden on covered
nonbanks that may face reputational
[[Page 48770]]
and other harms from publication. However, neither of these
alternatives would address the duplicative nature of the registry or
the costs to regulated entities and to the Bureau of maintaining the
registration system. Because the Bureau has concluded that the
collection of information mandated by the NBR Rule is not necessary,
the Bureau declines to pursue partial rescission of the NBR Rule's
other key components, which would leave the collection aspect in place.
---------------------------------------------------------------------------
\72\ Rescission of only the registration requirements without
rescinding the written-statement requirements or publication
provisions effectively would achieve full rescission of the NBR
Rule, since the latter two components are predicated on the first.
Accordingly, the Bureau did not consider rescission of only the
registration requirements as a reasonable alternative.
---------------------------------------------------------------------------
Apart from, or in addition to, rescinding the NBR Rule's non-
registration provisions, the Bureau could rescind certain aspects of
the registration requirements. For example, the Bureau could have
sought to limit the registration requirements to apply only to covered
orders that do not appear on NMLS, so that covered nonbanks with such
orders need not fulfill even the more limited registration obligation
for NMLS-published covered orders. The Bureau also could have sought to
require registration of only those orders issued or obtained by Federal
agencies, or to eliminate or reduce the number of State laws listed in
appendix A that qualify as covered laws under the NBR Rule. While these
approaches likely would have resulted in a reduction of the number of
nonbanks required to register with the Bureau, the burdens on those
that would have retained registration obligations still would not have
been justified by the rule's speculative and unquantified benefits. Nor
would the Bureau need this more limited collection regime to fulfill
its market monitoring and supervisory functions. Accordingly, the
Bureau declines to pursue a partial rescission of the NBR Rule's
registration requirements.
B. General Registration Requirement for Nonbanks
One commenter suggested another alternative to full rescission,
wherein the NBR Rule would be amended such that it serves as a general
requirement for nonbanks to register with the Bureau, regardless of
whether they have covered orders. Under this alternative, according to
the commenter, registration requirements would be tied to the Bureau's
complaint portal.
A general requirement for nonbanks to register with the Bureau that
is untethered to the nonbank being under a covered order would be
materially different in scope and type from the NBR Rule. A shift to
such an approach would require additional analysis of the costs and
benefits involved and identification of unique benefits to consumers
and the Bureau. The Bureau thus concludes that a general nonbank
registration requirement is not an alternative to the NBR Rule but
instead would amount to an entirely different alternative rulemaking,
and therefore declines to pursue this approach.
X. Effective Date of Final Rule
Proposed Rescission Rule
The Administrative Procedure Act (APA) generally requires that
substantive rules be published not less than 30 days before their
effective dates, subject to exceptions.\73\ The Bureau proposed that,
once issued, the final rule would be effective on the date that it is
published in the Federal Register, because the Bureau preliminarily
found that two of the APA's exceptions would apply to the rule. First,
the rule would ``grant[ ] or recognize[ ] an exemption or relieve[ ] a
restriction,'' and second, there was ``good cause'' for the rescission
of the NBR Rule to be immediately effective upon publication because
the rescission would end all information submission requirements for
regulated entities and so was not the kind of rule for which regulated
entities would need additional time to conform their conduct.\74\
---------------------------------------------------------------------------
\73\ 5 U.S.C. 553(d).
\74\ 5 U.S.C. 553(d)(1), (3).
---------------------------------------------------------------------------
Comments Received
Two industry commenters supported the proposal for the rescission
rule to take effect immediately upon publication in the Federal
Register. One of these commenters stated that the rule should take
effect immediately upon publication because rescission provides
regulatory relief and imposes no burden on regulated entities. The
other commenter agreed with the Bureau that the statutory exceptions to
the general requirement apply and stated that there are no
considerations that would support finalizing an effective date that is
30 or 60 days after publication.
Response to Comments Received
The final rule will take effect on the date of publication in the
Federal Register. The Bureau agrees with the two commenters that the
final rule meets the APA exceptions and that no additional time is
needed because of the rule's deregulatory effects. Specifically, the
final rule relieves covered nonbanks of the need to comply with the NBR
Rule's registration and written-statement requirements. Good cause
exists to expedite the final rule's effective date, as a final rule
that is effective upon publication will provide immediate relief to
such entities that otherwise may feel compelled to continue to expend
resources to comply with the NBR Rule before its rescission becomes
effective.
Final Rule
The effective date of the final rule is October 29, 2025.
XI. Dodd-Frank Act Section 1022(b) Analysis
A. Overview
In developing this final rule, the Bureau has considered the rule's
potential benefits, costs, and impacts.\75\ In developing this final
rule, the Bureau has consulted with, or offered to consult with, the
appropriate prudential regulators and other Federal agencies, including
regarding consistency with any prudential, market, or systemic
objectives administered by such agencies. Under CFPA sections
1022(c)(7)(C) and 1024(b)(7)(D), the Bureau has also consulted with
State agencies.\76\
---------------------------------------------------------------------------
\75\ Specifically, section 1022(b)(2)(A) of the CFPA requires
the Bureau to consider the potential benefits and costs of the
regulation to consumers and covered persons, including the potential
reduction of access by consumers to consumer financial products and
services; the impact of the proposed rule on insured depository
institutions and insured credit unions with $10 billion or less in
total assets as described in section 1026 of the CFPA; and the
impact on consumers in rural areas. 12 U.S.C. 5512(b)(2)(A).
\76\ 12 U.S.C. 5512(c)(7)(C), 5514(b)(7)(D).
---------------------------------------------------------------------------
The Bureau is issuing this final rule to rescind the requirement
that nonbanks report certain public agency and court orders imposing
obligations based on violations of consumer protection laws because the
Bureau believes this requirement unnecessarily imposes significant
obligations on nonbank covered persons that are not justified by
countervailing benefits to consumers or the Bureau.
The NBR Rule has three provisions. The first provision (hereinafter
referred to as the ``Registration Provision'') requires nonbank covered
persons that are subject to certain public orders to register with the
Bureau and to submit copies of each such public order to the Bureau.
The second provision (hereinafter referred to as the ``Supervisory
Reports Provision'') requires nonbank covered persons that are subject
to supervision and examination by the Bureau to prepare and submit an
annual written statement, signed by a designated individual, regarding
compliance with each covered public order with an effective date on or
after the applicable implementation date for the rule. The third
provision (hereinafter referred to as the ``Publication Provision'')
describes the registration information the Bureau may
[[Page 48771]]
make publicly available. Accordingly, for purposes of this analysis,
this final rescission rule can be divided into three provisions that
each rescind one of the three provisions of the NBR Rule.
B. Data Limitations and Quantification of Benefits, Costs, and Impacts
The discussion below relies in part on information that the Bureau
has obtained from commenters, other regulatory agencies, and publicly
available sources. The Bureau performed outreach with other regulatory
agencies on many of the issues addressed by the NBR Rule that are
further considered here. However, as discussed further below, the data
are generally limited with which to quantify the costs, benefits, and
impacts of the final provisions. In light of these data limitations,
the analysis below generally provides a qualitative discussion of the
benefits, costs, and impacts of the final provisions. General economic
principles and the Bureau's experience and expertise in consumer
financial markets, together with the limited data that are available,
provide insight into these benefits, costs, and impacts.
The limited data that are available include the registrations the
Bureau has received so far because of the NBR Rule. The registration
deadlines that flowed from the NBR Rule were January 14, 2025, for
larger participants, April 14, 2025, for other supervised nonbanks, and
July 14, 2025, for other covered nonbanks. Because as time progressed
market participants likely assessed a decreasing probability that the
NBR Rule would be maintained or enforced, the registration data are
most likely to be accurate for larger participants, less likely to be
accurate for other supervised nonbanks, and even less likely to be
accurate for other covered nonbanks.
Roughly 250 entities have so far created an account in the NBR
system. However, of these only roughly 110 have registered an order.
Very few entities submitted a good-faith notice that they were not
covered nonbanks or that their orders were not covered orders, so a
majority of the registrations received so far are incomplete. This
could indicate that some entities were unsure of their obligations
under the NBR Rule or confused by the NBR system. It could also
indicate that some entities started the registration process but
stopped when rescission of the NBR Rule became increasingly likely and
interim enforcement of the NBR Rule became increasingly unlikely.
Because the registration data are incomplete and not representative,
the analysis below does not rely on them.
C. Baseline for Analysis
In evaluating the benefits, costs, and impacts of the final rule,
the Bureau takes as a baseline the current legal framework regarding
orders covered by the NBR Rule. Therefore, the baseline for the
analysis of this final rule is that nonbank covered persons are
required to register with the Bureau, nonbank covered persons subject
to Bureau supervision and examination generally are required to prepare
and submit annual reports regarding compliance with covered orders, and
information on the nonbank covered persons and most corresponding
covered orders may be published by the Bureau in the manner
contemplated by the NBR Rule.
Relative to the baseline, the costs and benefits of this final
rescission rule discussed below depend on how many nonbank covered
persons would comply with the NBR Rule even if it were not prioritized
for enforcement by the Bureau. The Bureau believes that, under the
baseline, some nonbank covered persons would comply with the NBR Rule,
but the Bureau cannot quantify how many.
This final rescission rule should affect the market as described
below for as long as it is in effect. However, the costs, benefits, and
impacts of any rule are difficult to predict far into the future.
Therefore, the analysis below of the benefits, costs, and impacts of
the final rule is most likely to be accurate for the first several
years following implementation of the final rule.
D. Potential Benefits and Costs of the Final Rule to Consumers and
Covered Persons
The costs and benefits of these provisions are discussed separately
below. However, one benefit of this final rule applies to repealing
these provisions jointly. The Bureau estimated in its PRA Supporting
Statement for the NBR Rule that the annual costs to the Federal
government to operate the registry would amount to ``$2.5 million for
external vendor support and 10,400 hours of Federal staff time.'' \77\
Some of these costs have already been incurred and are unrecoverable.
Some other costs may be recoverable even under the baseline, such as
some of the costs for ongoing external vendor support or internal
reporting or reviews of incoming registrations for data quality and
accuracy. However, other such costs may not be recoverable under the
baseline because the Bureau would need to incur some of those costs
with respect to the registrations it already has received and any
registrations and supervisory reports it would continue to receive. In
addition, other costs (such as allocating resources to evaluate the
significance of any annual written statement reporting any instance of
noncompliance with a covered order, coordinating with various external
stakeholders seeking information from or about the registry, and
performing cybersecurity audits) will be recoverable only under this
final rule. Therefore, one benefit of this final rule will be to
recover these costs.
---------------------------------------------------------------------------
\77\ See discussion supra.
---------------------------------------------------------------------------
With certain exceptions, the NBR Rule (and by extension this final
rescission rule) applies to nonbank covered persons as defined in the
CFPA, including persons that engage in offering or providing a consumer
financial product or service.\78\ Among others,\79\ these products and
services generally include those listed below, at least to the extent
they are offered or provided for use by consumers primarily for
personal, family, or household purposes:
---------------------------------------------------------------------------
\78\ For the full scope of the term ``covered person,'' see 12
U.S.C. 5481(6).
\79\ For the full scope of the term ``consumer financial product
or service,'' see 12 U.S.C. 5481(5).
---------------------------------------------------------------------------
<bullet> Extending credit and servicing loans;
<bullet> Extending or brokering certain leases of personal or real
property;
<bullet> Providing real estate settlement services;
<bullet> Engaging in deposit-taking activities, transmitting or
exchanging funds, or otherwise acting as a custodian of funds;
<bullet> Selling, providing, or issuing stored value or payment
instruments;
<bullet> Providing check cashing, check collection, or check
guaranty services;
<bullet> Providing payments or other financial data processing
products or services to a consumer by any technological means;
---------------------------------------------------------------------------
\80\ See 12 U.S.C. 5481(15) (defining term ''financial product
or service'').
---------------------------------------------------------------------------
<bullet> Providing financial advisory services;
<bullet> Collecting, analyzing, maintaining, or providing consumer
report information or certain other account information; and
<bullet> Collecting debt related to any consumer financial product
or service.\80\
[[Page 48772]]
The Registration and Publication Provisions affect such covered
persons (as that term is defined in 12 U.S.C. 5481(6)) that (1) are not
insured depository institutions, insured credit unions, or related
persons (as that term is defined in 12 U.S.C. 5481(25)), and (2) have
had covered orders issued against them, unless such covered persons are
subject to certain exclusions. The Supervisory Reports Provision
affects such covered persons that (1) are subject to supervision and
examination by the Bureau pursuant to CFPA section 1024(a),\81\ (2)
have had covered orders issued against them that took effect on or
after the implementation date, (3) are at or above the $5 million
annual receipt threshold specified in the NBR Rule,\82\ unless such
covered persons are subject to certain exclusions, and (4) are not
registering all such covered orders under the one-time registration
option for NMLS-published covered orders under Sec. 1092.203.
To derive an estimate of the number of affected entities under the
final rule using publicly available data, the Bureau used data from the
most recent Economic Census. Table 1 below presents entity counts for
the North American Industry Classification System (NAICS) codes that
generally align with the financial services and products listed above.
The markets defined by NAICS codes in some cases include entities that
do not qualify as covered nonbanks under the NBR Rule. It is also
possible that some covered nonbanks may not be counted in the table
below, because, e.g., the financial services they provide are not their
primary line of business.
Table 1--Potential Scope of Proposed Rule
------------------------------------------------------------------------
Number of NAICS
NAICS name(s) NAICS code(s) entities
------------------------------------------------------------------------
Nondepository Credit 5222.............. 14,330
Intermediation.
Activities Related to Credit 5223.............. 13,618
Intermediation.
Portfolio Management............ 523920............ 24,430
Investment Advice............... 523930............ 17,510
Passenger Car Leasing........... 532112............ 449
Truck, Utility Trailer, and 532120............ 1,612
Recreational Vehicle Rental and
Leasing.
Activities Related to Real 5313.............. 79,563
Estate.
Consumer Reporting.............. 561450............ 307
Debt Collection................. 561440............ 3,224
---------------------------------------
Total....................... .................. 155,043
------------------------------------------------------------------------
Therefore, for purposes of its analysis of this final rescission
rule, the Bureau estimates that there are roughly 155,043 covered
nonbanks. As noted above, covered nonbanks will only be affected by the
NBR Rule (and by extension this final rescission rule) if they are
subject to covered orders. Based on its experience and expertise, in
its analysis for the NBR Rule the Bureau estimated and reaffirms here
that perhaps one percent, and at most five percent, of covered nonbanks
are subject to covered orders. Therefore, the Bureau estimates that
this final rescission rule would likely affect between 1,550 and 7,752
covered nonbanks.
---------------------------------------------------------------------------
\81\ 12 U.S.C. 5514(a).
\82\ See 12 CFR 1092.201(q)(4).
---------------------------------------------------------------------------
In the NBR Rule, the Bureau sought to check the reasonableness of
its estimate by obtaining data from a database titled ``Violation
Tracker,'' maintained by Washington, DC-based nonprofit Good Jobs First
(<a href="https://violationtracker.goodjobsfirst.org/">https://violationtracker.goodjobsfirst.org/</a>). As described in the NBR
Rule, using these data the Bureau estimated that orders plausibly
covered by the NBR Rule applied to roughly 3,700-4,000 unique entities.
The Bureau notes that these numbers are consistent with its estimate of
the number of entities likely to be affected by the final rule (1,550
to 7,752 covered nonbanks).
As discussed above, the Bureau has to date received roughly 250
submissions reflecting registrations or apparent efforts to begin
registrations under the NBR Rule. Also, as discussed above, an unknown
number of entities subject to the provisions of the NBR Rule have not
yet registered or begun registrations with the Bureau, both because of
the Bureau's announcement that it would not prioritize enforcement of
these provisions and because of the Bureau's announcement that it would
rescind the provisions. Therefore, the Bureau does not view 250 as a
reliable estimate of the number of entities that will be affected by
this final rule, but it is likely to be a lower bound on the number of
entities that will be affected by this final rule. This lower bound is
not inconsistent with the estimates above.
1. Registration Provision
Under this final provision, affected entities will no longer be
required to provide to the Bureau: (1) identifying information and
administrative information and (2) information regarding covered
orders. For covered persons subject to the Registration Provision that
have already completed registrations, most of the costs associated with
the Registration Provision are unrecoverable.
For entities that have not yet complied with the Registration
Provision but are subject to it, the benefits of this final provision
depend on whether they would register under the baseline. For affected
entities that would not comply with the Registration Provision under
the baseline, the main benefit of this final provision will be to
reduce legal risk. The Bureau cannot quantify this benefit. For
affected entities that would comply with the Registration Provision
under the baseline, the main benefit of this final provision is that
they will no longer need to incur the costs to do so. The Bureau
estimates this benefit to be on the order of at least a few hours of an
employee's time per order. The benefit will likely be higher for firms
with covered orders that are frequently modified. The benefit will
likely be lower for firms that have NMLS-published covered orders and
under the baseline would exercise the one-time registration with
respect to those orders.
To obtain a quantitative estimate of the benefit of this final
provision, the Bureau assesses the average hourly base wage rate for
the reporting requirement at $50.88 per hour. This is the mean hourly
wage for employees in four major occupational groups assessed to be
most likely responsible for the registration process: Management
($68.15/hr); Legal
[[Page 48773]]
Occupations ($66.19/hr); Business and Financial Operations ($45.04/hr);
and Office and Administrative Support ($24.12hr).\83\ We multiply the
average hourly wage of $50.88 by the private industry benefits factor
of 1.42 to get a fully loaded wage rate of $72.25/hr.\84\ The Bureau
includes these four occupational groups in order to account for the mix
of specialized employees that may assist in the registration process.
The Bureau assesses that the registration process is completed by
office and administrative support employees that are generally
responsible for the registrant's paperwork and other administrative
tasks. Employees specialized in business and financial operations or in
legal occupations likely provide information and assistance with the
registration process. Senior officers and other managers likely review
the registration information before it is submitted and may provide
additional information. Assuming as outlined above a fully loaded
hourly wage rate of roughly $72, and that complying with the
Registration Provision would take around five hours of employees' time,
yields an estimated cost of complying with the Registration Provision
of around $360 per firm. Therefore, this final provision would provide
a benefit of around $360 per firm.
---------------------------------------------------------------------------
\83\ See U.S. Bureau of Labor Statistics, National Occupational
Employment and Wage Estimates United States (May 2024), <a href="https://www.bls.gov/oes/current/oes_nat.htm">https://www.bls.gov/oes/current/oes_nat.htm</a>.
\84\ As of March 2025, the ratio between total compensation and
wages for private industry workers is 1.42. See U.S. Bureau of Labor
Statistics, Employer Costs for Employee Compensation: Private
industry dataset (March 2025), <a href="https://www.bls.gov/web/ecec/ecec-private-dataset.xlsx">https://www.bls.gov/web/ecec/ecec-private-dataset.xlsx</a>.
---------------------------------------------------------------------------
In the NPRM for this rescission, the Bureau sought specific comment
on the extent to which the costs imposed by the NBR Rule, if reversed
by this final rule, would result in the benefit of reduced compliance
burden to nonbank entities. One nonprofit commenter stated, with
respect to the benefits to covered persons of rescinding the NBR Rule,
that compliance with the rule's registration requirements is simple,
such as through the one-time registration option, and supervised
entities need only submit an annual certification. This is partially
consistent with feedback the Bureau received from some initial
registrants, who indeed stated that the registration process was simple
but also that it was challenging for nonbanks to understand whether and
when they needed to register. Another commenter stated that the NBR
Rule understated the costs the Registration Provision imposed on
covered entities. If this commenter is correct, then the benefits of
this final provision estimated above are conservative, and the true
benefits to nonbank covered persons will be larger.
This final provision will likely not impose any costs on affected
entities.
This final provision will likely not bring significant benefits to
consumers. As noted above, this final provision will lower costs for
some firms, and those firms may respond to these decreased costs by
decreasing prices for consumers. However, economic theory generally
predicts no to low price passthrough rates for fixed operating costs
like those imposed by the NBR Rule, although there is disagreement
among researchers, depending upon assumptions.\85\ Moreover, as
discussed above, the benefits of this final provision will be limited,
so any price decreases caused by the rule will also be limited. For
example, if this final provision saves 4,000 firms each on average
$360, then the total savings of this final provision that could be
passed on to consumers in aggregate is $1,440,000. Most firms will not
be affected at all by this final provision and so will not decrease
prices because of this final provision.
---------------------------------------------------------------------------
\85\ See Kamphorst et al., Fixed costs matter even when the
costs are sunk, (2020) Economics Letters 195.
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This final provision will likely not impose any significant costs
on consumers. Specifically, the Bureau believes that information
submitted under the Registration Provision is not helpful for the
fulfillment of its statutory duties and so it provides no benefits to
consumers. Accordingly, rescinding the Registration Provision will
impose no costs on consumers.
2. Supervisory Reports Provision
This provision will only affect covered nonbanks subject to Bureau
supervision and examination that have a covered order that took effect
on or after the implementation date and whose annual receipts from
consumer financial products and services are $5 million or more.
Furthermore, this provision will only affect such nonbanks that do not
have, or under the baseline would choose not to exercise, the one-time
registration option for NMLS-published covered orders. Therefore, this
provision will affect fewer covered nonbanks and fewer consumers than
the Registration Provision analyzed above.
For entities that have not yet complied with the Supervisory
Reports Provision but are subject to it, the benefits of this provision
depend on whether they would comply with the Supervisory Reports
Provision under the baseline. For affected entities that would not
comply with the Supervisory Reports Provision under the baseline, the
main benefit of this final provision will be to reduce legal risk. The
Bureau cannot quantify this benefit. For affected entities that would
comply with the Supervisory Reports Provision under the baseline, the
main benefit of this final provision is that they will no longer need
to incur the costs to do so.
One effect on these entities will be that they will no longer need
to designate an attesting executive. Under the existing NBR Rule, the
attesting executive must be a duly appointed senior executive officer
(or, if no such officer exists, the highest-ranking individual at the
entity charged with managerial or oversight responsibilities) (i) whose
assigned duties include ensuring the supervised registered entity's
compliance with Federal consumer financial law, (ii) who possesses
knowledge of the supervised registered entity's systems and procedures
for achieving compliance with the covered order, and (iii) who has
control over the supervised registered entity's efforts to comply with
the covered order. The Bureau believes that, even under this final
rule, most supervised entities will still take active steps to comply
with covered orders and therefore will have such an officer or
individual in place to oversee the entity's compliance with its
obligations under the covered order. Therefore, the Bureau anticipates
that rescinding this designation requirement will not change the
ability of most supervised registered entities to name an attesting
executive, were one required, so the overall benefit of rescinding the
designation requirement will be small. However, rescinding this
designation requirement will benefit supervised entities that lack a
high-ranking officer or other employee with the requisite
qualifications to serve as an attesting executive.
Under the baseline, the existing Supervisory Reports Provision
requires that the supervised registered entity submit a written
statement signed by the applicable attesting executive for each covered
order to which it is subject. In the written statement, the attesting
executive must: (i) generally describe the steps that the attesting
executive has undertaken to review and oversee the supervised
registered entity's activities subject to the applicable covered order
for the preceding calendar year; and (ii) attest whether, to the
attesting executive's knowledge, the supervised registered entity
during the preceding calendar year identified any violations or other
instances of noncompliance
[[Page 48774]]
with any obligations that were imposed in a public provision of the
covered order by the applicable agency or court based on a violation of
a covered law.
The Bureau does not have the data to precisely quantify the benefit
of the rescission of the written-statement requirement on impacted
firms. Based on its experience and expertise, the Bureau believes that
most entities subject to covered orders endeavor in good faith to
comply with them and already have in place some manner of systems and
procedures to help achieve such compliance. However, the Bureau also
believes that even at entities endeavoring in good faith to comply with
covered orders, executives (or potential executives) may be reluctant
to take on the administrative and legal burden of signing the required
attestation. Therefore, under the baseline, these entities may have
difficulty hiring or retaining such executives, and may incur
additional costs to do so. This is consistent with social science
research finding that human behavior can be greatly affected by even
small probabilities of losses.\86\ It is also consistent with multiple
comments submitted by several different trade associations, as well as
feedback the Bureau received from industry after the registry system
went live. The Bureau agrees with these commenters that rescinding the
attestation provision will allow affected entities to attract and
retain effective compliance professionals at lower cost. The Bureau
cannot quantify this benefit.
---------------------------------------------------------------------------
\86\ See Kahneman and Tversky, Prospect Theory: An Analysis of
Decision Under Risk, (1979) Econometrica 47(2).
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While under the baseline the attesting executive must sign the
written statement, the Bureau believes that other employees in other
major occupational groups (Legal Occupations, Business and Financial
Operations, and Office and Administrative Support) support the
attesting executive in preparing the statement. Assuming that
satisfying the written-statement requirement takes twenty hours of
employees' time, and that the average cost to entities of an employee's
time is roughly $72 an hour as discussed above, yields an estimate that
the cost of this requirement on affected entities is roughly $1,440 per
firm. Therefore, repealing this provision would further save affected
entities roughly $1,440.
In addition, under the baseline, the Supervisory Reports Provision
requires entities to maintain records related to the written statement
for five years. Assuming that ensuring the necessary documents are
properly stored also requires ten hours of employee time adds $720 to
the costs to affected entities of this final provision. Therefore,
another benefit of this final provision will be to save affected
entities this estimated $720.
The benefits of this final provision may be even higher at larger
entities, because identifying instances of noncompliance with
obligations imposed in a public provision of a covered order may be
more complex at larger entities. The benefits will also likely be
higher at entities with multiple instances of noncompliance with public
provisions of covered orders, or with multiple covered orders.
One commenter argued that the compliance attestation requirement
helps to prevent repeat issues by holding executive leadership
accountable for order compliance, and that rescission of the
attestation requirement would increase the risk of repeat issues at
supervised nonbanks and so impose a cost on consumers. It is possible
that, under the baseline, some supervised registered entities would put
in place extra systems and procedures to allow them to more confidently
identify violations or other instances of noncompliance with any
obligations that were imposed in a public provision of the covered
order. If this final provision causes these entities not to put in
place these systems, it could impose a cost on consumers. However, as
noted above, based on its experience and expertise, the Bureau believes
that most entities subject to covered orders endeavor in good faith to
comply with them and will already have in place some manner of systems
and procedures to help achieve such compliance. Therefore, the Bureau
believes that the number of supervised registered entities that will
not put in place significant new compliance systems and procedures as a
result of the rule will be relatively small, generating little
potential cost to consumers. Moreover, as discussed above the Bureau
believes that rescinding the Supervisory Reports Provision will allow
affected entities to more effectively attract and retain compliance
professionals. This will benefit consumers, although the Bureau does
not have data to quantify this benefit.
This provision will likely not impose any costs on affected
entities or consumers. Specifically, the Bureau believes that
information submitted under the Supervisory Reports Provision is not in
a form that is likely to be helpful for its statutory duties and so
provides no benefits to consumers, and so rescinding the Supervisory
Reports Provision will impose no costs on consumers.
3. Publication Provision
The Publication Provision allows the Bureau, at its discretion, to
publish on the Bureau's internet website (1) registered entities'
identifying information, (2) information regarding covered orders that
they provide to the Bureau, and (3) for supervised registered entities,
the name and title of the attesting executive.
As discussed in part VIII above, the Bureau believes that
publishing this information would be confusing and costly for consumers
and firms, and provide little or no benefit to other regulators.
Therefore, even under the baseline, the Bureau is unlikely to exercise
its ability to publish this information, and so this information would
not be published either under the baseline or under the final rule.
Therefore, rescinding this provision will impose no costs on entities
and no benefits or costs to consumers. The Bureau anticipates that, by
providing more certainty that this information will not be published,
this provision may provide benefits to some firms. The Bureau cannot
quantify this benefit.
E. Potential Specific Impacts of the Final Rule
1. Insured Depository Institutions and Insured Credit Unions With $10
Billion or Less in Total Assets, as Described in Section 1026
This final rule will only apply to nonbanks. Therefore, it will
have no direct impacts on any insured depository institution or insured
credit union. The rule may have some indirect effects on some insured
depository institutions and insured credit unions with $10 billion or
less in total assets. For example, insured depository institutions and
insured credit unions that are affiliated with affected entities might
experience indirect benefits because the final rule may benefit their
nonbank affiliates. Insured depository institutions and insured credit
unions that compete with affected entities might experience indirect
costs because of the proposed rule because the proposed rule may
benefit their competitors. But as noted above, even for nonbanks that
are directly affected by the final rule, the Bureau does not anticipate
that the rule's impact will be significant in most cases. Therefore,
the Bureau anticipates that any indirect effects on insured depository
institutions or insured credit unions
[[Page 48775]]
with $10 billion or less in total assets will be even less significant.
2. Impact of the Proposed Rule on Access to Consumer Financial Products
and Services and on Consumers in Rural Areas
By benefiting affected covered nonbanks, the final rule may cause
affected covered nonbanks to provide more or better financial products
and services (or financial products and services at lower cost) to
consumers. Therefore, the negative impact of the final rule on consumer
access to financial products and services would be limited.
Broadly, the Bureau believes that the analysis above of the impact
of the final rule on consumers in general is applicable to the impact
of the final rule on consumers in rural areas as well. However, the
impact of the final rule on consumers in rural areas will likely be
relatively smaller if the proposed rule affects fewer entities in rural
areas. The Bureau does not have high-quality data on the rural market
share of entities that will be affected by the final rule, so the
Bureau cannot judge with certainty the relative impact of the rule on
rural areas. However, for certain large and well-studied markets, there
is evidence that nonbanks have larger market shares in urban areas and
smaller market shares in rural areas.\87\ Based on this limited
evidence, the Bureau expects that the impact of the final rule will be
smaller in rural areas.
---------------------------------------------------------------------------
\87\ For evidence on the mortgage market, see Julapa Jagtiani,
Lauren Lambie-Hanson, and Timothy Lambie-Hanson, Fintech Lending and
Mortgage Credit Access, 1 The Journal of FinTech (2021). For
evidence on the auto loan market, see Donghoon Lee, Michael Lee, and
Reed Orchinik, Market Structure and the Availability of Credit:
Evidence from Auto Credit, MIT Sloan Research Paper (2022), <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3966710">https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3966710</a>.
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XII. Executive Order 12866
The Office of Information and Regulatory Affairs within the Office
of Management and Budget (OMB) has determined that this action is not a
``significant regulatory action'' under E.O. 12866, as amended.
E.O. 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 is not aware of the
existence of a market failure or other compelling public need that
would justify the retention of the ``Registry of Nonbank Covered
Persons Subject to Certain Agency and Court Orders,'' adopted via 89 FR
56028 on July 8, 2024.
XIII. 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 head of the
agency certifies that the rule will not have a significant economic
impact on a substantial number of small entities.\88\ 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.\89\
---------------------------------------------------------------------------
\88\ 5 U.S.C. 601 et seq.
\89\ 5 U.S.C. 609.
---------------------------------------------------------------------------
A FRFA is not required for this final rule because it will not have
a significant economic impact on a substantial number of small
entities.
B. Impact of Final Provisions on Small Entities
The NBR Rule has three principal sets of substantive provisions.
The first set of provisions (hereinafter referred to as the
``Registration Provision'') requires nonbank covered persons that are
subject to certain public agency and court orders enforcing the law to
register with the Bureau and to submit certain information related to
those public orders to the Bureau. The second set of provisions
(hereinafter referred to as the ``Supervisory Reports Provision'')
requires nonbank covered persons that are supervised by the Bureau to
prepare and submit an annual written statement, signed by a designated
individual, regarding compliance with each covered public order that
took effect after the applicable implementation date. The third set of
provisions (hereinafter referred to as the ``Publication Provision'')
describes the registration information the Bureau may make publicly
available. Accordingly, for purposes of this analysis, this final
rescission rule can be divided into three provisions that each rescind
one of the three principal sets of substantive provisions of the NBR
Rule.
The analysis below evaluates the economic impact of the final
provisions on small entities as defined by the RFA.\90\ The RFA's
definition of ``small'' varies by type of entity.\91\
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\90\ 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 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).
\91\ U.S. Small Bus. Admin., Table of Small Business Size
Standards Matched to North American Industry Classification System
Codes, <a href="https://www.sba.gov/sites/default/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf">https://www.sba.gov/sites/default/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf</a> (current SBA size standards).
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With certain exceptions, this final rule will apply to covered
persons as defined in the CFPA, including persons that engage in
offering or providing a consumer financial product or service.\92\
Among others,\93\ these products and services would generally include
those listed below, at least to the extent they are offered or provided
for use by consumers primarily for personal, family, or household
purposes.
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\92\ For the full scope of the term ``covered person,'' see 12
U.S.C. 5481(6).
\93\ For the full scope of the term ``consumer financial product
or service,'' see 12 U.S.C. 5481(5).
---------------------------------------------------------------------------
<bullet> Extending credit and servicing loans;
<bullet> Extending or brokering certain leases of personal or real
property;
<bullet> Providing real estate settlement services;
<bullet> Engaging in deposit-taking activities, transmitting or
exchanging funds, or otherwise acting as a custodian of funds;
<bullet> Selling, providing, or issuing stored value or payment
instruments;
<bullet> Providing check cashing, check collection, or check
guaranty services;
<bullet> Providing payments or other financial data processing
products or services to a consumer by any technological means;
<bullet> Providing financial advisory services;
<bullet> Collecting, analyzing, maintaining, or providing consumer
report information or certain other account information; and
<bullet> Collecting debt related to any consumer financial product
or service.\94\
---------------------------------------------------------------------------
\94\ See 12 U.S.C. 5481(15) (defining term ``financial product
or service'').
---------------------------------------------------------------------------
The Registration and Publication Provisions affect such covered
persons (as that term is defined in 12 U.S.C. 5481(6)) that (1) are not
insured depository institutions, insured credit
[[Page 48776]]
unions, or related persons (as that term is defined in 12 U.S.C.
5481(25)), and (2) have had covered orders issued against them, unless
such covered persons are subject to certain exclusions. The Supervisory
Reports Provision affects such covered persons that (1) are subject to
supervision and examination by the Bureau pursuant to CFPA section
1024(a),\95\ (2) have had covered orders issued against them that took
effect on or after the implementation date, (3) are at or above the $5
million annual receipt threshold, unless such covered persons are
subject to certain exclusions, and (4) are not registering all such
covered orders under the one-time registration option for NMLS-
published covered orders under Sec. 1092.203.
---------------------------------------------------------------------------
\95\ 12 U.S.C. 5514(a).
---------------------------------------------------------------------------
The Bureau does not have reliable information on the number of
small, covered firms that are subject to covered orders. Therefore, the
Bureau cannot reliably estimate the number of small entities that will
be impacted by the final rule.
1. Registration Provision
Under the provision of this final rule rescinding the Registration
Provision, affected entities will no longer be required to provide to
the Bureau: (1) identifying information and administrative information
and (2) information regarding covered orders. This should lower
compliance costs and legal risk for entities, including small entities.
Therefore, the rescission of the Registration Provision will impose no
significant burden on small entities.
2. Supervisory Reports Provision
Under the Supervisory Reports Provision of the existing NBR Rule,
affected entities must designate an attesting executive. The attesting
executive must be a duly appointed senior executive officer (or, if no
such officer exists, the highest-ranking individual at the entity
charged with managerial or oversight responsibilities) (i) whose
assigned duties include ensuring the supervised registered entity's
compliance with Federal consumer financial law, (ii) who possesses
knowledge of the supervised registered entity's systems and procedures
for achieving compliance with the covered order, and (iii) who has
control over the supervised registered entity's efforts to comply with
the covered order.
Furthermore, the existing Supervisory Reports Provision requires
that the supervised registered entity submit on annual basis a written
statement signed by the applicable attesting executive for each covered
order to which it is subject that took effect after the applicable
implementation date. In the written statement, the attesting executive
must: (i) generally describe the steps that the attesting executive has
undertaken to review and oversee the supervised registered entity's
activities subject to the applicable covered order for the preceding
calendar year; and (ii) attest whether, to the attesting executive's
knowledge, the supervised registered entity during the preceding
calendar year identified any violations or other instances of
noncompliance with any obligations that were imposed in a public
provision of the covered order by the applicable agency or court based
on a violation of a covered law.
Under the provision of this final rule rescinding the Supervisory
Reports Provision, affected entities will no longer have to designate
an attesting executive or submit a written statement signed by the
applicable attesting executive for each covered order to which they are
subject that took effect after the applicable implementation date. This
should lower compliance costs and legal risk for entities, including
small entities. Therefore, the rescission of the Supervisory Reports
Provision will impose no significant burden on small entities.
3. Publication Provision
The Publication Provision allows the Bureau, at its discretion, to
publish (1) registered entities' identifying information, (2)
information regarding covered orders that they provide to the Bureau,
and (3) for supervised registered entities, the name and title of the
attesting executive, on the Bureau's internet website. Rescinding this
provision should not impose any costs on entities, including small
entities. Therefore, the provision of this final rule rescinding the
Publication Provision will impose no significant burden on small
entities.
For the reasons described above, the Bureau believes that no
provision of the final rule will have a significant economic impact on
a substantial number of small entities. Moreover, the impact of each
provision is sufficiently small that the three provisions together will
not have a significant economic impact on a substantial number of small
entities.
Accordingly, the Acting Director certifies that this final rule
will not have a significant economic impact on a substantial number of
small entities. Thus, a FRFA is not required for this final rule.
XIV. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Bureau will submit a report containing this rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the United States prior to the rule taking
effect. The Office of Information and Regulatory Affairs has designated
this rule as not a ``major rule'' as defined by 5 U.S.C. 804(2).
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.
Authority and Issuance
PART 1092--[Removed and Reserved]
0
For the reasons set forth above, and under the authority of 12 U.S.C.
5512 and 5514, the Bureau amends 12 CFR chapter X by removing and
reserving part 1092.
Russell Vought,
Acting Director, Consumer Financial Protection Bureau.
[FR Doc. 2025-19689 Filed 10-28-25; 8:45 am]
BILLING CODE 4810-AM-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.