The Consumer Financial Protection Bureau (CFPB) announced its first use of a dormant legal provision allowing it to establish supervisory authority over more nonbank financial companies.

Installment lender World Acceptance Corp. was subject to the agency’s first supervisory designation order announced Friday. The CFPB said in a press release it published the order to “provide transparency about how it assesses risks using consumer complaints and other factors.”

In April 2022, the CFPB warned it was looking to increase its examination authority over nonbanks to “level the playing field” between banks and them. The agency’s director, Rohit Chopra, cited the rapid growth of these companies as reason to ensure proper supervision and prevent harm to consumers.

Since then, the agency said it has undertaken a process in which it provides notice to entities not currently subject to supervision that it believes pose potential risk to consumers. The entities can either consent to supervision or contest the notice.

While the CFPB said most targets have consented, World Acceptance did not. The agency determined the company “met the legal requirements for supervision,” despite the order not including any findings that wrongdoing occurred.

The order explains the CFPB’s process for the determination, which considered that World Acceptance is a covered person that provides consumer financial products or services and engages in conduct that poses risks to consumers, including the potential provision of misleading coverage plans and inaccurate information to consumer reporting agencies.

Despite counterarguments by World Acceptance, the agency said consumer complaints it received were sufficient to establish reasonable cause for supervision, that it was not required to show risks posed by World Acceptance’s conduct were unique, and that a prior CFPB investigation that was closed without action does not preclude the establishment of supervision.

Media representatives for World Acceptance could not be reached for comment.