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Warren Opens Nonbank Rule to Commentary

Seeking to dispel controversy surrounding recent rule-making efforts, ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) nominee and ""Treasury Department"":http://www.treasury.gov/Pages/default.aspx adviser Elizabeth Warren attended a virtual press conference on Thursday to invite public commentary and uphold the agency's claim to sweeping powers under the Dodd-Frank Act.

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In a brief statement, Warren defended the nonbank supervision program, justifying attempts by the agency to regulate nonbank companies and highlighting six markets in need of oversight.

""Today, there are thousands of companies that are not banks, but they are making loans or sending money to families in distant countries,"" Warren read from a prepared statement. ""These products from nonbanks form a large part of the overall consumer financial marketplace.""

Tying the intent of the Dodd-Frank Act to the ""CFPB"":http://www.consumerfinance.gov/, Warren called the regulation of nonbank companies ""a crucial piece of ""CFPB's"":http://www.consumerfinance.gov/ work,"" adding that, ""for the first time, many of these companies will be subject to this type of federal oversight.""

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Warren briefly touched on the proposed definition for so-called ""larger participants,"" citing nonbank mortgage companies, payday lenders, and private student lenders as subjects that would fall under the rule. She also said that the ""CFPB"":http://www.consumerfinance.gov/ plans to explore the regulatory possibilities for six markets, including consumer credit, consumer reporting services, debt collection, debt relief services, prepaid cards, and check-cashing and money-transmitting activities.

The Treasury adviser encouraged public participation in the rule-making process, referencing its Web site, ""www.ConsumerFinance.gov"":http://www.consumerfinance.gov/, where citizens and officials alike can suggest changes.

""CFPB"":http://www.consumerfinance.gov/ officials remained to answer questions, toeing the line drawn by Warren and reaffirming the agency's exact scope of authority within the body of law established by the Dodd-Frank Act.

Peggy Twohig, the ""CFPB's"":http://www.consumerfinance.gov/ nonbank supervisor, said that the agency has ""supervision authority [from Congress] over private lenders and consumer lenders, so we're going off the way the statute is set up.""

Asked how many nonbank companies the ""CFPB"":http://www.consumerfinance.gov/ would denote as ""larger participants,"" Twohig responded that inconclusive or unavailable data left the door open to as many as ""tens of thousands, maybe hundreds of thousands"" of companies. She said that the ""CFPB"":http://www.consumerfinance.gov/ will have a better idea of their exact nature and number once ""we start doing our job and monitoring the markets.""

She and other officials shot down suggestions from reporters that a lacking Warren would delay or otherwise impede ""CFPB's"":http://www.consumerfinance.gov/ progress, saying that a headless agency is ""not an issue.""

Mark Calabria, director of financial regulation studies at the ""Cato Institute"":http://www.cato.org/, cast doubt on the ability for the ""CFPB"":http://www.consumerfinance.gov/ to fully operate without a leader, saying that ""a whole new set of powers├â┬ó├óÔÇÜ┬¼├é┬ª cannot be implemented without its director.""

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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