WASHINGTON– The CFPB has published four advance notices of proposed rulemaking in which it is soliciting public comment on whether it should raise the size thresholds that determine which nonbank entities qualify as “larger participants” subject to its supervision.
The notices address the automobile-financing, international money-transfer, consumer-reporting, and consumer debt-collection markets.
“While the four proposed rulemakings do not directly impact credit unions – the changes in thresholds signal an intention from the Bureau to move away from one-size-fits-all approaches to supervision,” said America’s Credit Unions.
Rules More Than 10 Years Old
Each of the applicable larger participant rules were put in place between 2012 and 2015 under the Consumer Financial Protection Act and set a threshold based on origination volume or annual receipts.
The Bureau said it is now considering whether those thresholds may sweep in too many small and midsize firms, thereby diverting limited supervisory resources from the largest market participants.
According to the CFPB, only a few very large entities now dominate each market.
The Proposals
The CFPB is proposing:
- Automobile Financing. Raise the 10,000-origination bar to 300,000, 550,000, or 1,050,000 loans or leases. The CFPB said only five captive lenders would remain under supervision, covering about 42% of originations.
- International Money Transfers. The CFPB is proposing to increase the one-million-transfer test to 10 million, 30 million, or 50 million annual remittances. The Bureau said the change would reduce the number of covered providers from 28 to as few as four, while still capturing between 61%-94% of transfer volume.
- Consumer Reporting. The CFPB said it is seeking to align the $7 million-receipt trigger with the Small Business Administration’s $41 million small-business cap. The Bureau said the change would exclude dozens of regional and specialty bureaus while continuing to provide oversight of at least six nationwide players within reach.
- Debt Collection. The CFPB is proposing to increase the $10 million-receipt threshold to $25 million, $50 million, or $100 million in response to what it said is industry consolidation and rising SBA size standards. Even at $50 million, the CFPB is estimating it would still cover more than 40% of market revenue.
Comments on the advance notices will be due 45 days after publication in the Federal Register.
