On June 3, the CFPB issued its final rule codifying its "repeat offender registry." The registry will require certain nonbank entities subject to agency or court orders issued in connection with the provision of a consumer financial product or service, to report the existence of such orders to the CFPB's public registry.
The final rule applies to orders that:
- Are final, public, and issued by a government agency or court;
- Identify a covered nonbank by name as a party subject to the order;
- Were issued at least in part in any action or proceeding brought by any federal, state, or local agency;
- Contain public provisions that impose obligations on the covered nonbank to take certain actions or to refrain from taking certain actions;
- Impose obligations on the covered nonbank based on an alleged violation of a covered law, which includes federal consumer financial laws, other laws enforced by the CFPB, and certain UDAAP laws at both federal and state levels; and
- Have an effective date on or after January 1, 2017.
The final rule excludes insured depository institution, insured credit union, and federally recognized Indian tribes, among others.
Covered nonbanks subject to covered orders will be required to submit certain corporate identity information, administrative information, and information regarding the covered order (e.g., copies of the order, issuing agencies or courts, effective and expiration dates, and laws found to have been violated). In addition, the final rule will require covered nonbanks to file annual reports attesting to their compliance with the registered orders.
The final rule will take effect on September 16, 2024, and registration for covered nonbanks is set to begin as early as October 16, 2024.
Putting it into Practice: The final rule underscores how high a priority reining in repeat offenders is for the Bureau (see previous blog posts here, here, and here). One important aspect of the registry is the attestation that companies must provide that they are in compliance with all applicable court and agency orders. If the CFPB later finds such an attestation is inaccurate, it could subject the company to enforcement action by the Bureau, as well as additional action by the agency or court that issued the order.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.