Jan. 6, 2012 – Information detailing the nonbank supervision program – the one initiative that NAFCU strongly supported during the debate on the Dodd-Frank Act – was released Thursday by the CFPB as its new director, Richard Cordray, was completing an address before the Brookings Institution Thursday.
The supervision program, the bureau said, will focus on firms that offer or provide consumer financial products or services but do not have bank, thrift or credit union charters. That includes non-depository mortgage lenders, mortgage servicers, payday lenders, consumer reporting agencies, debt collectors and money services companies. It can also supervise “larger participants,” and the CFPB will soon propose its initial rule for carrying that out.
It said CFPB examiners will be trained in bank and nonbank supervision to ensure flexibility in resource allocation. The examination manual released by the bureau in October will be used for both programs as well.
NAFCU, in comments on the matter of larger participants, urged the CFPB to cast as wide a net as possible but to focus on the nonbank providers that handle the greatest share consumer financial services transactions among all.
The bureau says early 20 million consumers use payday loans; about 200 million rely on credit reporting agencies to maintain their credit histories; 14 percent have one or more debts in collections. It says nonbank lenders originated almost 2 million new mortgages in 2010.