Trump administration plans rollback of Biden-era CFPB nonbank supervision rules

The Trump administration is moving to roll back Biden-era rules at the Consumer Financial Protection Bureau (CFPB) that required businesses subject to federal regulatory orders to submit those for listing on CFPB registries.

A pair of documents obtained exclusively by FOX Business showed the CFPB is planning to issue an order rescinding a rule known as the NBR Orders Rule that required nonbank entities subject to orders issued by government agencies related to financial products to report those orders to a CFPB registry.

“The Bureau is finalizing the rescission of the NBR Rule based on concerns that 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 discussed in the analysis proffered in the NBR Rule,” the agency wrote.

The NBR Rule was finalized in July 2024 and took effect in September of last year. The Biden-era CFPB believed the rule would advance the agency’s market monitoring and nonbank supervision responsibilities by collecting and publishing information about orders applying to nonbanks and steps taken to comply with those orders.

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“Specifically, it believed that the Bureau’s establishment of a centralized system for collecting and publishing information about covered orders against covered nonbanks would lead to more efficient and effective monitoring, detection, assessment, public awareness, and mitigation of the risks posed to consumers by violations of Federal consumer financial law, including repeat violations,” the agency said.

CFPB estimated that the compliance burden would include 35 hours of paperwork, including five hours for the initial registration, and 30 hours for the annual report, including recordkeeping costs. It also estimated that the NBR Rule would impact between 1,550 and 7,752 covered nonbanks and cause them to incur a labor cost of $350 each for the initial registration and $2,100 for the annual reporting cycle.

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OMB Director Russell Vought is also serving as the acting director of the CFPB. (Andrew Harnik/Getty Images)

In moving to rescind the rule, the CFPB determined that the “NBR Rule is not a necessary tool for monitoring and reducing risks to consumers from bad actors,” in part because there are other federal and state agencies enforcing consumer finance laws.

Earlier this year, the CFPB announced that it wouldn’t enforce the NBR Orders Rule, and the upcoming order would formally rescind the regulation.

The CFPB is also moving to withdraw a proposed rule that would collect information about supervised nonbanks’ use of terms and conditions in form contracts that look to limit consumers’ legal rights. 

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Rohit Chopra served as CFPB chair during the Biden administration. (Samuel Corum/Bloomberg via Getty Images)

Among the limitations it looked to address were waivers of claims consumers can bring in a legal action or to determine the timeframe or forum of such an action, limits on company liability to a consumer, limits on the consumers’ ability to participate in class action lawsuits, curbs on the ability of consumers to complain or post reviews, and arbitration agreements.

The CFPB said the rule would’ve imposed significant burdens on covered nonbanks that “are not justified by their uncertain and speculative benefits.” The agency added that it has considered changes and updates to its policies, agenda and objectives in withdrawing the proposed rule.

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The proposed rule was published on Feb. 1, 2023, but wasn’t finalized and will be withdrawn under the pending CFPB filing.