The Consumer Financial Protection Bureau (CFPB) continued its push to establish supervisory authority over more nonbank financial companies with the adoption of a procedural rule to streamline the process for such designations.
The rule, posted Tuesday, comes less than two months after the agency announced its first case where it established its oversight authority over a firm that did not consent to supervision. The CFPB said other firms have consented and that it “looks forward to a productive supervisory relationship with all the institutions that are now within its supervisory authority.”
The new rule aligns with an agency transition to a new organizational structure for its supervision and enforcement work that will affect supervisory designation proceedings. A CFPB supervision director will initiate such proceedings with a notice of reasonable cause. The rule makes changes to simplify the requirements that notice must meet but does not make any changes to the rights to respond by nonbank covered entities.
“The bureau believes the reduction in time and general streamlining of the decisional process will benefit nonbank covered entities by improving the efficiency of this rule’s application,” the rule said.
The rule will become effective upon publication in the Federal Register.
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