CFPB Creates Registry to Help Law Enforcement Track ‘Corporate Repeat Offenders’

The Consumer Financial Protection Bureau building in Washington, on Oct. 31, 2023. Madalina Vasiliu/The Epoch Times

The Consumer Financial Protection Bureau (CFPB) said on Monday that it will create a new registry to assist law enforcement agencies in detecting companies that have violated consumer protection laws.

The CFPB said it has finalized a rule requiring “nonbank entities” to register with the bureau upon being found in violation of consumer law. This includes submitting final agency and court orders to the CFPB.

Nonbank companies subject to federal, state, or court orders will also need to provide a written attestation from a senior executive confirming their compliance with the orders, the bureau said.

“Too often, financial firms treat penalties for illegal activity as the cost of doing business,” CFPB director Rohit Chopra said in a press release.

“The CFPB’s new rule will help law enforcement across the country detect and stop repeat offenders,” he added.

According to the consumer watchdog, the new registry will enable law enforcement agencies to identify “bad actors” who are seeking to restart a scam, fraudulent scheme, or other illegal conduct.

The new registry also intends to help investors, creditors, business partners, and members of the public who are performing due diligence on financial firms subject to law enforcement orders.

“While the list of banks, credit unions, and many mortgage companies are known to regulators and the public, many other types of financial companies are not licensed or registered, either through the Nationwide Multistate Licensing System (NMLS) or other regulatory registries.

“However, in the Consumer Financial Protection Act, Congress gave the newly created CFPB the authority to register nonbanks. This authority supports the CFPB’s role to monitor risks posed by nonbanks to consumers,” the bureau stated.

The CFPB first proposed the regulation in December 2022, seeking public feedback. The bureau had sought to publish company information, which is issued with agency and court orders, via an online registry.

‘First-Ever Rule’ Under CFPB Authority

This marks “the first-ever rule” under the CFPB’s authority to register nonbank companies, which will allow law enforcement agencies to monitor companies posing risks to consumers.

“Given the variety of offenses of a company, such as TransUnion, it can be difficult for regulatory and law enforcement authorities to track,” Mr. Chopra said in a separate statement.

“The registry will make tracking violations of orders easier, and stop serious harm before it spreads,” he added.

Mr. Chopra said that the CFPB has taken numerous steps to stop repeat offenses, including forming a “Repeat Offenders Unit” to monitor and track companies subject to the agency’s orders.

“We are looking beyond fines and penalties in our repeat offender investigations, including a close examination of the individuals involved in calling the shots. We are even shutting down lines of business that are at the center of repeat problems,” he stated.

Last month, the Supreme Court rejected a challenge by the Community Financial Services Association of America (CFSA)—which represents payday lenders—to the constitutionality of the funding scheme Congress uses to fund the CFPB.

The case questioned the constitutionality of CFPB’s ability to determine its level of funding from The Federal Reserve, albeit with limited restrictions. Congress set up that funding when it created the agency but CFSA argued legislators exceeded their authority under the Constitution’s Appropriations Clause.

Sam Dorman contributed to this report.