WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President, and CEO, issued the following statement in response to the Consumer Financial Protection Bureau’s (CFPB’s) final rule creating a registry of nonbank lawbreakers.
“The CFPB’s new registry of nonbank lawbreakers is a big victory for financial consumers and a major loss for lawbreakers. The CFPB’s registry will comprehensively collect and make available to the public nonbanks that have been caught violating consumer laws. Consumers will be able to go to one place and see which nonbanks have been violating the law and how often, as well as those nonbanks that have not.
“The registry will have many benefits. First, identifying nonbanks that violate consumer protection laws, especially repeat offenders, will enable consumers to avoid those nonbanks and avoid becoming victims themselves. Second, public identification should act as a deterrent to other nonbanks to avoid breaking the law and being publicly revealed as lawbreakers if not repeat offenders. Third, law-abiding nonbanks will be able to distinguish themselves from the lawbreakers and should thereby gain a competitive advantage in the marketplace. Finally, regulators and policymakers will be able to see concerning trends highlighted by this information and respond in a more timely, targeted, and effective manner. Thus, all but the lawbreakers should celebrate the CFPB’s registry.
“This is incredibly important particularly now because consumers no longer primarily do business with regulated banks. Nonbanks are largely unregulated and there’s very little public information readily available to consumers, including in particularly regarding their history of violating consumer laws. This CFPB action fills that information gap. This is not a novel idea: under the oversight of the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) operates ‘BrokerCheck’ which allows anyone to quickly look up the disciplinary history of any securities broker.
“By creating this ‘one-stop-shop’ registry, where the public, financial consumers, academics, regulators, prosecutors, and state and local policymakers alike can see and evaluate nonbanks’ activities, the CFPB continues to create a safer and fairer consumer financial system that reduces lawbreaking.”
Read our full comment letter in support of the registry rule here.
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