February 03, 2023

NAFCU Reg Alert highlights CFPB’s proposed registry of supervised nonbanks

CFPBNAFCU sent members a Regulatory Alert Thursday, highlighting the CFPB’s proposed rule to require supervised nonbanks to annually register information about their terms and conditions in a CFPB system. While the proposal does not impact how the bureau applies its authority to credit unions, the CFPB could use the registry to signal supervisory scrutiny of contractual provisions that may not be expressly prohibited by federal consumer financial law.

The Regulatory Alert explained that nonbanks would have to register if they use covered terms or conditions that attempt to waive consumers’ rights. Certain credit union service organizations (CUSOs) could be defined as a “nonbank.” The alert also noted that the proposal requires nonbanks to identify if courts or arbitrators have issued decisions on the enforceability of their terms and conditions.

NAFCU has engaged lawmakers offering support for arbitration calling it a “fair, effective, and less expensive means of resolving disputes compared to going to court.”

Comments on the proposed rule are due to NAFCU on March 20; comments are due to the CFPB April 3. Subscribe to receive Regulatory Alerts in your inbox.