Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders; Proposed Rescission

CONSUMER FINANCIAL PROTECTION BUREAU <CFR>12 CFR Part 1092</CFR> <DEPDOC>[Docket No. CFPB-2025-0011]</DEPDOC> <RIN>RIN 3170-AB32</RIN> <SUBJECT>Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders; Proposed Rescission</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Consumer Financial Protection Bureau. <HD SOURCE="HED">ACTION:</HD> Proposed rule; request for comment. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Consumer Financial Protection Bureau (Bureau or CFPB) is proposing to rescind its rule requiring certain types of nonbank covered persons subject to certain final public orders obtained or issued by a government agency in connection with the offering or provision of a consumer financial product or service to report the existence of the orders and related information to a Bureau registry. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received on or before June 13, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit responsive information and other comments, identified by Docket No. CFPB-2025-0011, by any of the following methods: • <E T="03">Federal eRulemaking Portal: https://www.regulations.gov.</E> Follow the instructions for submitting comments. A brief summary of this document will be available at <E T="03">https://www.regulations.gov/docket/CFPB-2025-0011.</E> • <E T="03">Email: 2025-NPRM-OrdersRegistryRepeal@cfpb.gov.</E> Include Docket No. CFPB-2025-0011 in the subject line of the message. • <E T="03">Mail/Hand Delivery/Courier:</E> Comment Intake—Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders; Proposed Rescission, c/o Legal Division Docket Manager, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552. <E T="03">Instructions:</E> The CFPB encourages the early submission of comments. All submissions should include the agency name and docket number. Additionally, where the Bureau has asked for specific comment on a topic, commentors should seek to highlight the topic to which its comment is applicable. Because paper mail is subject to delay, commenters are encouraged to submit comments electronically. In general, all comments received will be posted without change to <E T="03">https://www.regulations.gov.</E> All submissions, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Proprietary information or sensitive personal information, such as account numbers or Social Security numbers, or names of other individuals, should not be included. Submissions will not be edited to remove any identifying or contact information. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> George Karithanom, Regulatory Implementation and Guidance Program Analyst, Office of Regulations, at 202-435-7700. If you require this document in an alternative electronic format, please contact <E T="03">CFPB_Accessibility@cfpb.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Description of the Proposed Rule</HD> Pursuant to its authority under sections 1022(b); 1022(c)(1)-(4), (7); and 1024(b) of the Consumer Financial Protection Act of 2010, 12 U.S.C. 5512 and 5514, the Bureau is proposing to rescind the rule and regulations adopted on July 8, 2024, via 89 FR 56028, Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders, and codified in 12 CFR part 1092 (the “NBR Rule”). That rule requires certain types of nonbank covered persons subject to certain final public orders of a government agency to report the existence of the orders and related information and to file annual compliance reports. The Bureau is proposing to repeal the rule and is seeking comments on that proposal, including non-speculative and methodologically rigorous analysis of the purported benefits and costs that were identified when the rule was promulgated. The Bureau is proposing to rescind the NBR Rule based upon concern that the costs the rule imposes on regulated entities, and which may in large part be passed onto consumers, are not justified by the speculative and unquantified benefits to consumers discussed in the analysis proffered in the NBR Rule. The significant regulatory burden imposed by the NBR Rule has been highlighted by numerous commenters other than the regulated entities, including the Small Business Administration's Office of Advocacy and the Conference of State Bank Supervisors. The Bureau further believes that the NBR Rule is not necessary as a tool to effectively monitor and reduce potential risks to consumers from bad actors as Congress has authorized multiple other Federal and State agencies to enforce Federal consumer financial laws. <HD SOURCE="HD1">II. Proposed Effective Date of Final Rule</HD> The Bureau is proposing to make this rule effective on the date that any rule finalizing this proposal is published in the <E T="04">Federal Register</E> . The Bureau believes that, because this rule would rescind all information submission requirements under the NBR Rule, regulated entities would benefit from the rescission becoming effective immediately upon publication of a final rule and doing so would not be disruptive to their business operations. The Administrative Procedure Act (APA) generally requires that a substantive rule be published “not less than 30 days before its effective date,” subject to exceptions. <SU>1</SU> <FTREF/> The Bureau preliminarily finds that two of the APA's exceptions would apply to the proposed rescission rule. First, the rule would “grant[ ] or recognize[ ] an exemption or relieve[ ] a restriction.”  <SU>2</SU> <FTREF/> Second, there is “good cause” for the rescission to be immediately effective upon publication, because the rescission would end all information submission requirements for regulated entities and so is not the kind of rule for which regulated entities would need additional time to conform their conduct. <SU>3</SU> <FTREF/> <FTNT> <SU>1</SU>  5 U.S.C. 553(d). </FTNT> <FTNT> <SU>2</SU>  5 U.S.C. 553(d)(1). </FTNT> <FTNT> <SU>3</SU>  5 U.S.C. 553(d)(3). </FTNT> The Bureau seeks specific comment on this proposal to make the rule effective immediately upon publication in the <E T="04">Federal Register</E> , including whether there are any considerations that would, in the alternative, support the rule being published 30 or 60 days before becoming effective. <HD SOURCE="HD1">III. Dodd-Frank Act Section 1022(b)(2) Analysis</HD> <HD SOURCE="HD2">A. Overview</HD> In developing this proposal to rescind the NBR Rule, the Bureau has considered the potential benefits, costs, and impacts of doing so. The recission would eliminate the requirement for nonbanks to report the existence of certain public agency and court orders obtained or issued by a government agency in connection with the offering or provision of a consumer financial product or service and related information to a Bureau registry. The Bureau is proposing to rescind the NBR Rule based upon concern that the costs the rule imposes on regulated entities, and which may in large part be passed onto consumers, are not justified by the speculative and unquantified benefits to consumers discussed in the analysis proffered in the NBR Rule. The Bureau further believes that the NBR Rule is not necessary as a tool to effectively monitor and reduce potential risks to consumers from bad actors as Congress has authorized multiple other Federal and State agencies to enforce Federal consumer financial laws. The rescission of the NBR Rule would largely entail a juxtaposition of the estimated costs and purported benefits discussed in the preamble of the NBR Rule, such that the estimated costs discussed in the NBR Rule would constitute the benefits of a recission, and the purported benefits discussed in the NBR Rule would constitute the costs of a recission. However, even if finalized, the rescission of the NBR Rule will not fully restore the baseline that would capture the NBR Rule's impacts. For example, some of the fixed costs of compliance discussed in the “Dodd-Frank Act Section 1022(b)(2) Analysis” section of the NBR Rule  <SU>4</SU> <FTREF/> have already been expended. <SU>5</SU> <FTREF/> As such they are, perhaps to varying extents depending on each covered person's circumstances, unrecoverable. In addition, some of the costs that were quantified in the NBR Rule, and which are in fact recoverable by nonbank covered persons subject to the NBR Rule, may become benefits under this proposed rule. However, the quantification of the resulting benefits may differ from that of the corresponding costs discussed in the NBR Rule to the extent that the wage rates or other factors considered in the Bureau's estimations have changed. <FTNT> <SU>4</SU>  89 FR 56028, 56134-43 (July 8, 2024). </FTNT> <FTNT> <SU>5</SU>  For example, as of April 15, 2025, approximately 212 unique entities have already registered orders under the NBR Rule (including entities that utilized the one-time registration option provided for in 12 CFR 1092.203). </FTNT> The Bureau seeks specific comment on the extent to which the costs discussed in the NBR Rule, if reversed by the proposed rescission, would result in the benefit of reduced compliance burden to nonbank entities. Correspondingly, the Bureau seeks specific comment on the extent to which the purported benefits discussed in the NBR Rule would result in additional costs to consumers as a direct result of a recission. Because the purported benefits discussed in the NBR Rule were largely speculative and unquantified, the Bureau is specifically interested in any comments that could model such benefits in a quantitative and methodologically rigorous manner. <HD SOURCE="HD2">B. Potential Specific Impacts of ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 16k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━