Procedures for Supervisory Designation Proceedings

CONSUMER FINANCIAL PROTECTION BUREAU <CFR>12 CFR Part 1091</CFR> <DEPDOC>[Docket No. CFPB-2025-0013]</DEPDOC> <RIN>RIN 3170-AB34</RIN> <SUBJECT>Procedures for Supervisory Designation Proceedings</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 (CFPB or Bureau) is proposing to rescind the amendments it adopted on April 29, 2022, November 21, 2022, and April 23, 2024, to the Procedures for Supervisory Designation Proceedings. </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-2025-0013, 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-2025-0013</E> . • <E T="03">Email: 2025-NPRM-Supervisory-Designation@cfpb.gov.</E> Include Docket No. CFPB-2025-0013 in the subject line of the message. • <E T="03">Mail/Hand Delivery/Courier:</E> Comment Intake—Procedures for Supervisory Designation Proceedings, c/o Legal Division Docket Manager, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552. <E T="03">Instructions:</E> The Bureau encourages the early submission of comments. All submissions should include the agency name and docket number. 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> The Bureau is proposing to rescind the amendments to the Procedures for Supervisory Designation Proceedings that it adopted on April 29, 2022, at 87 FR 25397; on November 21, 2022, at 87 FR 70703; and on April 23, 2024, at 89 FR 30259. These amendments were codified in 12 CFR 1091. Collectively, the rules proposed for rescission provided for public release of final decisions and orders by the Director and made other changes to the CFPB's procedures for designating nonbank covered persons for supervision. We propose to rescind the rules in full and seek comment on that proposal. The Bureau has particular concerns about the manner in which the April 2022, November 2022, and April 2024 amendments provided for public release of decisions and orders. If an entity consents to supervisory designation, under the procedures as amended there is no decision or order issued by the Director that is eligible for public release. However, if it exercises its statutory right to contest designation, that choice may ultimately result in a public decision and order asserting that the entity “is engaging, or has engaged, in conduct that poses risks to consumers.” 12 U.S.C. 5514(a)(1)(C). Because businesses are concerned about their public reputations, this procedural disparity may put inappropriate pressure on entities to consent to designation, even when they have good arguments that designation is unwarranted. The Bureau also requests comment on the impact of public release on supervised entities and the supervisory process. With respect to other changes made by the amendments, the Bureau's preliminary view subject to considering comments is that they were largely unnecessary. <LSTSUB> <HD SOURCE="HED">List of Subjects in 12 CFR Part 1091</HD> Administrative practice and procedure, Consumer protection, Credit, Trade practices. </LSTSUB> <HD SOURCE="HD1">Authority and Issuance</HD> As discussed above, the Bureau proposes to revise 12 CFR part 1091 to read as follows: <HD SOURCE="HED">PART 1091—PROCEDURES FOR SUPERVISORY DESIGNATION PROCEEDINGS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>1091.100</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> <SECTNO>1091.101</SECTNO> <SUBJECT>Definitions.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Determination and Voluntary Consent Procedures</HD> <SECTNO>1091.102</SECTNO> <SUBJECT>Issuance of Notice of Reasonable Cause.</SUBJECT> <SECTNO>1091.103</SECTNO> <SUBJECT>Contents of Notice.</SUBJECT> <SECTNO>1091.104</SECTNO> <SUBJECT>Service of Notice.</SUBJECT> <SECTNO>1091.105</SECTNO> <SUBJECT>Response.</SUBJECT> <SECTNO>1091.106</SECTNO> <SUBJECT>Supplemental oral response.</SUBJECT> <SECTNO>1091.107</SECTNO> <SUBJECT>Manner of filing and serving papers.</SUBJECT> <SECTNO>1091.108</SECTNO> <SUBJECT>Recommended determination.</SUBJECT> <SECTNO>1091.109</SECTNO> <SUBJECT>Determination by the Director.</SUBJECT> <SECTNO>1091.110</SECTNO> <SUBJECT>Voluntary consent to Bureau's authority.</SUBJECT> <SECTNO>1091.111</SECTNO> <SUBJECT>Notice and response included in adjudication proceeding otherwise brought by the Bureau.</SUBJECT> <SECTNO>1091.112</SECTNO> <SUBJECT>No limitation on relief sought in civil action or administrative adjudication.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Post-Determination Procedures</HD> <SECTNO>1091.113</SECTNO> <SUBJECT>Petition for termination of order.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Time Limits and Deadlines</HD> <SECTNO>1091.114</SECTNO> <SUBJECT>Construction of time limits.</SUBJECT> <SECTNO>1091.115</SECTNO> <SUBJECT>Change of time limits and confidentiality of proceedings.</SUBJECT> </SUBPART> </CONTENTS> <HD SOURCE="HED">Authority: </HD> 12 U.S.C. 5512(b)(1), 5514(a)(1)(C), 5514(b)(7). <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 1091.100</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> This part sets forth procedures to implement section 1024(a)(1)(C) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Public Law 111-203 (12 U.S.C. 5514(a)(1)(C)) (Dodd-Frank Act), and establishes rules to facilitate the Bureau's supervisory authority over certain nonbank covered persons pursuant to section 1024(b)(7) of the Dodd-Frank Act ( <E T="03">12 U.S.C. 5514(b)(7)</E> ). </SECTION> <SECTION> <SECTNO>§ 1091.101</SECTNO> <SUBJECT>Definitions.</SUBJECT> For the purposes of this part, the following definitions apply: <E T="03">Assistant Director</E> means an Assistant Director for Supervision. If there is no Assistant Director, the Associate Director may designate an alternative Bureau employee to perform the functions of an Assistant Director under this part. <E T="03">Associate Director</E> means the Associate Director of the Bureau's Division of Supervision, Enforcement, and Fair Lending, or his or her designee. If there is no Associate Director, the Director may designate an alternative Bureau employee to perform the functions of the Associate Director under this part. <E T="03">Bureau</E> means the Consumer Financial Protection Bureau. <E T="03">Consumer</E> means an individual or an agent, trustee, or representative acting on behalf of an individual. <E T="03">Consumer financial product or service</E> means any financial product or service, as defined in <E T="03">12 U.S.C. 5481(15),</E> that is described in one or more categories under: (1) 12 U.S.C. 5481(15) and is offered or provided for use by consumers primarily for personal, family, or household purposes; or (2) Clause (i), (iii), (ix), or (x) of 12 U.S.C. 5481(15)(A) and is delivered, offered, or provided in connection with a consumer financial product or service referred to in paragraph (1) of this definition. <E T="03">Decisional employee</E> means any employee of the Bureau who has not engaged in: (1) Assisting the initiating official in either determining whether to issue a Notice of Reasonable Cause, or presenting the initiating official's position in support of a Notice of Reasonable Cause, either in writing or in a supplemental oral response, to the Associate Director; or (2) Assisting the Associate Director in the preparation of a recommended determination. <E T="03">Director</E> means the Director of the Bureau or his or her designee. If there is no Director, the term shall mean a person authorized to perform the functions of the Director under this part, or his or her designee. <E T="03">Executive Secretary</E> means the Executive Secretary of the Bureau. <E T="03">Initiating official</E> means an Assistant Director or a Bureau employee designated to act as an “initiating official” by an Assistant Director. If there is not an Assistant Director, the Associate Director may designate a Bureau employee to perform the functions of an initiating official under this part. <E T="03">Nonbank covered person</E> means, except for persons described in 12 U.S.C. 5515(a) and 5516(a): (1) Any person that engages in offering or providing a consumer financial product or service; and (2) Any affiliate of a person described in paragraph (1) of this definition if such affi ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 42k characters. 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