CFPB's First Move with a Director in Place: Confront 'Nonbanks'

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(Saul Loeb-Getty Images)

The CFPB’s new supervision program doesn’t create any new regulations for nonbanks to follow. Instead, the program is intended to ensure that nonbanks comply with existing federal regulations.

One day after President Obama appointed Richard Cordray as director of the Consumer Financial Protection Bureau over the objections of Senate Republicans, the bureau announced the launch of a new “nonbank supervision program.”

What’s a “nonbank”? That’s the CFPB’s term for a lender that doesn’t have a bank, thrift, or credit union charter. Mortgage lenders, payday loan operations, debt collectors, and consumer reporting agencies are all considered “nonbanks.”

Millions of Americans deal with nonbanks regularly: Some 20 million consumers utilize payday loan services, while 2 million new mortgages were originated with nonbank lenders in 2010, and 14% of consumers have debt collectors after them.

. . . Instead of relying on “after-the-fact” investigations of potential wrongdoing, the CFPB will be empowered to conduct examinations of businesses as it sees fit. The bureau may also require reports, conduct interviews with nonbank workers, and observe the business in action to make sure that no federal laws are being violated.

read more: http://moneyland.time.com/2012/01/05/cfpbs-first-move-with-a-director-in-place-confront-nonbanks/?iid=pf-main-mostpop1

[annabanana]

1. He ALSO sent an email out asking

people to tell their stories of dealing with these "non-banks". There are horror stories galore. I'm liking this guy right out of the gate.