WASHINGTON, D.C. — Brady Williams, Legal Counsel for Better Markets, issued the following statement in connection with today’s filing of comment letters in response to the Consumer Financial Protection Bureau’s (CFPB) Requests for Comment on its proposed rule amending the CFPB’s Procedures for Supervisory Designation Proceedings and its proposed rescission of the Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders:
“In a one-two punch against consumer protection, the CFPB is moving to dismantle two cornerstone Biden-era transparency measures. Both rules were designed to shed light on entities that pose risks to consumers, especially in the underregulated nonbank financial sector, which includes payday lenders, debt collectors, and fintech firms.
“The first proposal will roll back rules that publicly disclose when the CFPB designates certain nonbank companies as risky to consumers and therefore subject to Bureau supervision. Under the current rules, if a company consents to supervision when the Bureau determines the company poses risks to consumers, these findings are not released to the public. But if the company contests supervision, the CFPB publicly releases its findings of consumer risk, ensuring transparency and accountability. The CFPB now proposes to reverse this, citing concerns about reputational harm to companies.
“The second proposal would eliminate the Registry of Nonbank Covered Persons, which was designed to centralize information about companies subject to public enforcement or court orders for violating consumer financial laws. As Better Markets argued in our initial 2023 comment letter in support of the rule, the registry was expected to serve as a vital resource for regulators, consumers, and advocates to identify repeat offenders and monitor patterns of misconduct.
“These rollbacks not only reduce transparency but also remove a critical deterrent against misconduct. If bad actors know their wrongdoing won’t be publicly tracked or disclosed, the incentive to reform disappears. The CFPB is essentially telling these risky and lawbreaking companies: ‘keep quiet, comply privately, and your record stays clean.’
“The CFPB was created after the 2008 financial crash, which was caused in large part by hidden risks and abuses. Rolling back transparency now is not only a policy failure but also a betrayal of the CFPB’s reason for existing in the first place. Rescinding these rules undercuts the CFPB’s mission and signals a retreat from its post-crisis mandate to protect consumers through public accountability. Better Markets calls on the Bureau to immediately withdraw both proposed rescissions and recommit to transparency, accountability, and the public interest.”
The Comment Letters are available here and here.
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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
