CFPB Discontinues Nonbank Violation Registry Citing Cost and Overlap

The Consumer Financial Protection Bureau (CFPB) has officially eliminated its Nonbank Registry Rule (NBR Rule), which required nonbank financial companies found violating consumer financial laws to report these violations in a public registry. The CFPB cited that the costs imposed by this rule on businesses and the agency, which could be passed on to consumers, outweighed the speculative and unquantified benefits to consumers, and that the registry largely duplicated existing state-level frameworks. This rollback aligns with broader deregulatory efforts under the current administration and has been supported by industry groups and state regulators for reducing redundancy and cost inefficiencies. However, consumer advocacy groups warn that removing this oversight could increase risks to consumers and financial stability, especially since nonbank lenders now originate about half of all loans in the U.S. The CFPB is also reversing other Biden-era policies, such as protections against medical debts appearing on credit reports, amidst concerns about the implications of reduced regulation on credit markets and consumer protection.