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Wednesday, July 25, 2012

CFPB Proposed Rule to Supervising Nonbanks

ABA supports the CFPB’s proposed rule that would set up procedures to supervise nonbanks that may have engaged in activities that pose risks to consumers, the association said in a comment letter.

ABA noted that community banks face competition not only from nationwide financial services providers, but also from entities that may lack a significant national market share but nonetheless are sizable competitors in certain local markets.
[ABA] supports the proposed procedures that will subject to the bureau’s supervisory authority even the smallest competitors who choose not to follow existing laws and regulations and are engaged in conduct that poses risk to consumers.

Moreover, we believe that the possibility of oversight should encourage compliance efforts that might otherwise be lacking in entities that believe that they will never be subject to the bureau’s supervisory and record-keeping requirements because they fall below the applicable larger participant threshold.
The association also emphasized that the Dodd-Frank Act-mandated proposed rule is an essential step toward ensuring that the CFPB enforces federal consumer financial law consistently and that markets for consumer financial products and services are fair, transparent and competitive.

Read the letter.
Read the proposed rule.

For a compendium of CFPB resources and analysis, see ABA's CFPBureau Watch.

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