The Consumer Financial Protection Bureau (the “CFPB”) has been a fully functioning regulatory agency for almost one year now, since July 21, 2011. The CFPB has already proceeded full speed with its bank regulatory and examination scheme. The CFPB has direct examination and enforcement authority for banks with $10 billion in assets or more. The other federal financial institution regulators (the FDIC, the OCC, and the Federal Reserve Board) still retain examination and enforcement authority for financial institutions below the $10 billion asset level. The regulation of nonbank financial entities, such as mortgage companies, check cashers, and other non-depository affiliated lenders, was put on hold until a Director of the CFPB could be named. Now that Richard Cordray has finally been appointed as Director, the pace of new developments and regulations has accelerated.
The CFPB’s nonbank supervision program will regulate and examine companies of all sizes in the mortgage, payday lending and private student lending markets, but for other financial companies, the CFPB will only have the authority to supervise those companies categorized as large participants in certain financial product markets such as debt collection, consumer reporting, money transmitting, check cashing, prepaid cards, and debt relief services. The definition of a “large participant” has yet to be finalized, but final rules must be issued no later than July 21, 2012.
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