Tennessee U.S. Congressman Andy Ogles (R-TN-05) led a group of House Financial Services Committee Republicans in sending a letter to the Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra expressing opposition to a proposal from the bureau to establish a nonbank registry.
It was announced last December that the CFPB proposed a rule to identify repeat financial law violators by creating a database of enforcement actions against certain nonbank-covered entities. According to the proposed rule, certain nonbank entities must register with the bureau and provide regular updates on their covered orders.
Furthermore, the bureau proposed that larger supervised nonbanks submit written statements regarding compliance with each underlying order annually signed by a senior executive with “knowledge of the entity’s relevant systems and procedures for achieving compliance and control over the entity’s compliance efforts.”
To these proposals, the group of House Republicans wrote, “In its simplest form, the Bureau is orchestrating a “name and shame” scheme with the implementation of such a registry.”
The group argues that the CFPB has no authority to “promulgate a registration rulemaking this robust.”
“Section 1022(c)(7) of the Consumer Financial Protection Act (CFPA) does not grant the Bureau authority to establish such a robust set of registration requirements, nor a database for a particular category of information. When Congress intends to create a database, it explicitly and clearly does so. Furthermore, the Bureau explicitly cannot require financial institutions to register,” the group states.
The group said, “We urge you to reverse course in your intention of publishing these final rules. The unnecessary tactics to harm financial institutions’ and nonbank firms’ reputations and customer relationships to advance the Bureau’s destructive policy objectives should be left out of the rulemaking process.”
In a separate statement, Ogles added, “The CFPB shouldn’t exist to begin with but at the very least it shouldn’t be proposing costly rules that violate the Consumer Financial Protection Act. This nonbank registry would impose severe and complex compliance measures on covered nonbank entities, including many small businesses. It’s an unnecessary, duplicative rule that pushes bureaucracy and costs onto the American people.”
Tennessee U.S. Representative John Rose (R-TN-06) was one of the Republicans on the House Financial Services Committee that signed Ogles’ letter.
ACA International, a trade group that represents debt collection agencies, creditors, debt buyers, collection attorneys, and debt collection industry service providers, commended Ogles for his “leadership in pushing back against the CFPB’s unconstitutional overreach which attempts to create name and shame lists and add unnecessary burdens to businesses working hard to have robust compliance programs.”
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Kaitlin Housler is a reporter at The Tennessee Star and The Star News Network.
Background Photo ” Consumer Financial Protection Bureau Building” by Ted Eytan. CC BY-SA 2.0.
As an economist, Andy is protecting the finances of our fellow Tennesseans.