CFPB Issues Filing Instructions for Nonbank Registry

Nonbank financial institutions that have been subject to public orders resulting from regulatory actions now have filing instructions on reporting information to a new registry meant to help identify repeat offenders.

The Consumer Financial Protection Bureau registry will list nonbanks subject to a public order from an agency or court. The CFPB has issued filing instructions that align with its recent assertions of authority under the Dodd-Frank Act to supervise nonbank financial institutions. 

Given the agency’s expanding reach and broad interpretation of its supervisory powers, nonbanks should continue to prepare for CFPB oversight.  

The final rule takes effect on September 16, 2024, but nonbanks should refer to the final rule (and see below) for important upcoming registration deadlines. 

Who needs to register?

Nonbanks that have entered into a covered order must register.

• Nonbanks offer or provide consumer financial products or services. The CFPB broadly construes nonbanks to include fintech companies, money transmitters, payment processors, lenders, leasing companies, consumer reporting agencies and debt collectors. Nonbanks do not include:
  • Insured depository institutions or insured credit unions (but their affiliates potentially are covered).
  • A person who is a “covered person” solely due to being a “related person” as defined by Dodd-Frank, such as a controlling shareholder, consultant or independent contractor.
  • A state or federally recognized Indian tribe.
  • A natural person.
  • Certain motor vehicle dealers.
  • A person who is a “covered person” only due to conduct excluded from the CFPB’s rulemaking authority, such as activities related to charitable contributions.
• Covered Orders:  The rule applies to final, written public orders that:
  • Name a covered nonbank.
  • Impose obligations based on alleged violations of covered laws.
  • Have an effective date on or after January 1, 2017. 
  • Were issued in actions brought by a federal, state or local agency.
  • Contain public provisions requiring the nonbank to take or refrain from taking certain actions.

What is required?

For All Covered Nonbanks:  Covered nonbanks must submit identifying information, administrative information and covered order information, including a copy of the order, covered laws determined or alleged to have been violated and related details. A covered nonbank must make additional submissions within 90 days of any of the following events:

• Changes to the nonbank’s identifying or administrative information.
• Amendments to previously registered covered orders.
• New covered orders applicable to the covered nonbank.
• Revised filings (if a previously registered order has expired or been terminated).

For CFPB-Supervised Covered Nonbanks:  The rule imposes additional requirements for covered nonbanks subject to CFPB supervision with at least $5 million in qualifying receipts. These entities must review and submit additional information about covered orders, including the identity of the “attesting executive,” and an annual written statement that certifies compliance with each order registered. CFPB-supervised covered nonbanks also must maintain records, for five years after submission, sufficient to provide reasonable support for the written statement.

For Covered Nonbanks with NMLS-Published Covered Orders:  Covered nonbanks subject to covered orders published on the Nationwide Multistate Licensing System’s Consumer Access website may choose to file a special one-time registration.  

When is the registration period?

The final rule categorizes covered nonbanks as:

• Larger Participant CFPB-Supervised Covered Nonbanks.
  • To determine whether a nonbank is a “larger participant,” the Bureau has issued interpretive rules detailing this determination for automobile financing, student loan servicing, consumer reporting, consumer debt collection, international money transfer and general-use digital consumer payment application.  
• Other CFPB-Supervised Covered Nonbanks.
• All Other Covered Nonbanks.

How do covered nonbanks file?

Covered nonbanks can create an account on the NBR Portal by providing contact information and company details. Once registered, a covered nonbank can submit required data at the “Order Management” tab for covered orders, including order identifying numbers, covered laws violated, details about the issuing court or government agency and a fully executed copy of the order. For annual and final statement filings, nonbanks also should upload the attesting executive’s information and required written statements. 

What should nonbanks expect? 

Given the expectation of a large number of companies subject to registration, we anticipate that the CFPB will encounter a significant number of questions related to registration. 

Notably, the CFPB plans to accept questions about registration only via a designated email address or the NBR Portal. The CFPB does not anticipate using a call center for registration support—unlike the NMLS. 

We encourage companies to study the Company Registration Sample Form the CFPB has provided and prepare for the process well before the deadline. 

Want to know more? Ask one of the authors (Marshall Bell, Heidi Bauer, Katy Ryan and Mike Rosenberg) or any member of Orrick’s Financial & Fintech Advisory team.