Last week, the American Financial Services Association (AFSA) sent a letter to the Consumer Financial Protection Bureau (CFPB), reiterating its enforcement concerns with the nonbank registry. AFSA has previously noted that the rule is overly broad and conflicts with various consumer protections already in place at both federal and state levels. According to AFSA, such a backward-looking registry could lead to multiple actions by multiple regulators for activities that have already been addressed.
The letter highlighted four main issues with the rule:
Firstly, AFSA stated that "this new registry seems currently structured to 'name and shame' rather than act as a useful tool to effectively monitor and understand financial markets related to nonbanks and reduce any potential risks to consumers."
Secondly, AFSA argued that "the rule is too broad to properly facilitate an effective risk-based nonbank supervision program."
Thirdly, it was pointed out that "the personal attestation requirement will create a disincentive for qualified individuals to take on potential exposure to liability and will make it harder for institutions to fill compliance positions and perform obligations to consumers."
Lastly, AFSA mentioned that "this effort to create a central registry is unnecessary at best and harmful at worst when it conflicts with the multitude of consumer protections and reporting structures already in place that are accessible to consumers and the CFPB alike."