The CFPB Invokes its “Dormant Authority” to Supervise Nonbanks that Present Risks to Consumers: What it Means for Nonbank Providers of Consumer Financial Products and Services
We first review the scope of the CFPB’s supervisory authority granted by Dodd-Frank and the source of its authority to supervise nonbanks that present risks to consumers. We then discuss how we expect the CFPB to use its risk-based authority, including the types of products it may target and its decision to make public the identities nonbanks. We also look at the practical impact of CFPB supervision for targeted nonbanks and what steps companies can take both to avoid becoming a CFPB target and to prepare for the possibility of a CFPB examination. Finally, we consider how the CFPB’s action could impact the approach of state regulators to nonbank providers of alternative credit products.
John Grugan, a partner in Ballard Spahr’s Consumer Financial Services Group, hosts the conversation, joined by Michael Gordon and Lisa Lanham, partners in the Group.