As a further reflection of its recent emphasis on “repeat offenders,” on December 12, the Consumer Financial Protection Bureau (CFPB) published a proposed rule with request for public comment that would require certain nonbank covered entities (with exclusions for insured depository institutions and credit unions) that are under certain final public orders issued by a federal, state, or local agency in connection with the offering or provision of a consumer financial product or service to report the existence of such orders to a CFPB registry. The CFPB would then include all final public written orders and judgments (including consent and stipulated orders and judgments) issued by the CFPB or any government agency for violation of certain consumer protection laws on an online registry. Additionally, larger companies subject to the CFPB’s supervisory authority would be required to designate an individual to attest to whether the firm is adhering to registered law enforcement orders. The CFPB states that it is proposing the rule pursuant to its authority under the Consumer Financial Protection Act of 2010.

According to the CFPB, the proposed rule’s objectives include:

  • Establishing an effective system for collecting public orders across different sectors of entity misconduct to allow the CFPB to more effectively monitor for potential risks to consumers arising from both individual instances and broader patterns of recidivism.
  • The CFPB also believes that a comprehensive collection of public agency and court orders would help it identify broader trends.
  • The CFPB further anticipates that making a registry of these orders publicly available would, among other things, allow other regulators at the federal, state, and local level tasked with protecting consumers to realize the same market monitoring benefits.
  • According to the CFPB, requiring certain supervised entities to designate a senior executive officer with knowledge of, and control over, the entity’s efforts to comply with each relevant order, and requiring that executive to submit the proposed written statement, might incentive otherwise reluctant entities to comply with consumer protection laws.

Beyond the stated objectives, the CFPB likely intends to use the information contained in the proposed registry in assessing civil penalties for violations of federal consumer financial laws, given that Congress has provided that such penalties should consider an entity’s “history of previous violations” and “such other matters as justice may require.”

The notice triggers a 60-day comment period (after publication in the Federal Register) for interested parties to submit comments.