On Thursday Consumer Financial Protection Bureau (CFPB) nominee Elizabeth Warren attended a virtual press conference, delineating six groups of nonbank companies that may soon fall under the agency's broad scope of authority.
The CFPB is responsible for ensuring that both banks and nonbanks comply with consumer financial protection and fair lending laws,"" Warren said, reading from a prepared statement. ""The examination of nonbank companies will be a crucial piece of ""CFPB's work.""
Nonbank companies, payday lenders, and private student loan makers will fall under the regulatory framework, joining tens of thousands, maybe hundreds of thousands"" of nonbank companies with consumer reporting, consumer credit, debt collection, debt relief, and money-transmitting and check-cashing services, according to Peggy Twohig, director of the ""CFPB's nonbank supervision program.
Under the Dodd-Frank Act, the CFPB must finalize rules and regulations consistent with the law and define ""larger participants"" in these markets by July 21. The agency invited public participation in an official commentary period.
For the first time, many of these companies will be subject to this type of federal oversight"" once the ""CFPB finalizes its rules and regulations, Warren said.
Early backers of the CFPB's maneuvers highlighted the positive potential of new rules for unregulated markets.
If done properly these six areas could benefit from increased transparency and uniform standards,"" said Scott Talbott, SVP of government affairs at the Financial Services Roundtable, according to ""_The Wall Street Journal_
Others seemed to reserve their judgment about the agency.
He said that AFSA represented more than 325 companies with myriad services potentially subject to the new rules, including debt collection agencies, consumer credit lenders, consumer reporters, prepaid service companies, and in-house debt relief services.
The senior executive added that he preferred the CFPB jettison federal mandates for an approach that respected and operated in tandem with state laws, citing the roles played by consumer credit administrators and attorneys general.
Asked to comment on whether industry insiders preferred ex-banker Raj Date to the controversial Elizabeth Warren, whom the Obama administration may withdraw from a tied-up confirmation process in favor of the former, Himpler responded that the AFSA and its members would work with the new director regardless of the occupant.
""We want to be good citizens,"" he said.
Other analysts seemed to side with the 44 Senate Republicans stalling the confirmation process for a CFPB director.
I have qualms and concerns about the agency,"" said Mark Calabria, director of financial regulation studies at the ""Cato Institute, describing the way in which regulators previously discussed trade-offs between consumer protection and bank soundness.
By separating those two functions, I fear [the ""CFPB] will result in more bank failures rather than less,"" Calabria said.