CFPB Rescinds Nonbank Registry Rule

The Consumer Financial Protection Bureau (CFPB) is rescinding two rules finalized during the Biden administration, including the nonbank registry rule, which required nonbanks to register and report violations of both local and state court orders. The decision was supported by mortgage trade groups, who said it reduces compliance burdens and redundancy.

“The costs the rule imposes on regulated entities, which may be passed on to consumers, are not justified by the speculative and unquantified benefits to consumers,” the final rule states, according to American Banker. The CFPB also claimed that “consumers are unlikely to use the registry as a comparison-shopping tool.”

In April, the CFPB announced that it would not enforce the nonbank registry rule and later indicated that it was considering rescinding it altogether due to cost concerns. Former CFPB Director Rohit Chopra went live with the rule in 2024 to target “corporate recidivists” and nonbank technology firms like Apple, Google, Meta, PayPal, and Square.

The Bureau under Trump Administration leadership, though,  claimed that consent orders and enforcement actions are readily available to the public, so it said that the registry was not a necessary tool to monitor and reduce consumer risks. Trade groups applauded the registry’s elimination of the registry, stating it was duplicative of the CFPB’s consumer complaint portal.

Richard Horn, a founder of the law firm Garris Horn LLP and former senior counsel at the CFPB, also supported the Bureau’s move to rescind the registry. “These registries would have been unnecessarily burdensome, and exposed companies to substantial new legal and reputational risk.”