The Consumer Financial Protection Bureau (CFPB) has proposed creating a public registry of nonbank financial institutions that have been subject to legal actions for violating consumer protection laws, effectively creating a list of shady businesses that consumers may want to avoid.
The CFPB’s newly proposed rule change would require financial corporations to register “upon becoming subject to a public written order or judgment imposing obligations based on violations of certain consumer protection laws.”
The registry would also allow the CFPB to track these companies, collect data to mitigate future consumer risks, and let the bureau share legal information with other regulators and law enforcement agencies.
Large corporations on the registry would also be required to submit annual updates about what they’re doing to abide by court orders to end their group’s lawbreaking.
Bartlett Naylor, the financial policy advocate for Public Citizen, said, “This not only would help law enforcers spot repeat offenders; the public would be able to look at a trusted registry to see if a particular company is worth the risk,” the progressive independent news outlet Common Dreams reported.
The CFPB’s proposed registry will be open for public comment for 60 days once it is published in the Federal Register.
Various legal challenges have questioned the constitutionality of the CFPB’s functions and existence. In 2020, the conservative-led U.S. Supreme Court said that the U.S. president has the right to remove the agency’s acting director, to ensure that the director isn’t protected from executive oversight. However, critics of the ruling said it could help neuter the agency and make its director act upon the will of the president rather than the interest of consumers.