The Consumer Financial Protection Bureau is exploring changes that could dramatically reduce the number of nonbank companies subject to its supervision in the debt collection, credit reporting, auto finance, and international money transfer markets.
🧭 Why it matters: These four markets are pillars of the consumer financial ecosystem and represent some of the CFPB’s most actively supervised areas. The proposed rollbacks come as the Bureau, under Acting Director Russell Vought, shifts its supervisory focus away from nonbanks and toward traditional banks. If finalized, the rule changes could shrink the CFPB’s authority in key markets by more than 90% in some cases.
🏛️ The big picture: The CFPB is issuing advance notices of proposed rulemakings for four previously finalized “larger participant” rules. These rules define which nonbank companies in each market are subject to the CFPB’s supervisory examinations.
Debt Collection:
- The CFPB currently supervises nonbank debt collectors with more than $10 million in annual receipts from collection activities.
- That covered about 175 entities when the rule was finalized in 2012.
- The Bureau is now considering raising the threshold to $100 million, which would leave as few as 11 companies under supervision.
Credit Reporting:
- The current threshold is $7 million in annual receipts.
- The CFPB is proposing to raise it to $41 million, aligning with the SBA’s small business size standard.
- That would reduce the number of supervised firms from around 60 to six, essentially leaving only Equifax, Experian, and TransUnion.
International Money Transfers:
- Today, nonbanks with over 1 million transfers annually are supervised, or about 28 companies.
- A proposed threshold of 50 million transfers would reduce that to just 4 companies, covering about 61% of the market.
Auto Finance:
- The current supervision cutoff is 10,000 originations per year, covering 63 firms that account for 94% of nonbank auto lending.
- One proposed increase, to 1,050,000 originations, would reduce oversight to just five companies, covering 42% of market activity.
💬 What they’re asking: The CFPB is inviting public comment on the costs and benefits of the current rules versus higher thresholds. Among the questions posed:
- Do the compliance burdens justify the number of companies currently supervised?
- Would raising thresholds reduce consumer protections?
- Are small or mid-sized firms unfairly burdened under the current rules?
Read the proposal for debt collection, auto finance, credit reporting, and international money transfers
