Proposed changes to the Consumer Financial Protection Bureau’s (CFPB) Supervisory Authority Over Certain Nonbank Covered Persons were the subject of a comment letter from our friends at the American Financial Services Association (AFSA).
The proposed changes would allow the Bureau to publicize its designation of a nonbank covered person as a “risky business.” AFSA expressed concern that the change in the confidentiality of proceedings would create unfair distrust of the named companies, especially given that the Bureau has still not defined what it considers a “risk to consumers.”
If the Bureau designates a business as risky, AFSA contends, it sends a message to the market that something is wrong with that business. Without the ability to make public remarks about the supervision, the business would be left without a way to defend itself against the harmful designation.
AFSA’s letter notes,
“providing a bright-line definition would clarify to the covered persons what the Bureau considers inappropriate conduct and aid the Bureau in allocating its time to properly supervise truly risky businesses.”
NILA concurs entirely with AFSA’s position on this issue and commends them for highlighting the flaws in the CFPB’s proposal.
AFSA’s letter can be viewed HERE.
SOURCE: American Financial Services Association