CFPB Seeks To Regulate Six Non-Banking Sectors
The Consumer Financial Protection Bureau (CFPB) could soon oversee 100,000 firms, bureau officials said last week. Elizabeth Warren and the CFPB leadership held a press call Thursday, outlining six areas that could soon be subject to CFPB oversight. The six areas are debt collection; consumer reporting; consumer credit and related activities; money transmitting, check cashing and related activities; prepaid cards and debt relief services. The bureau is not permitted to begin regulating non-bank firms until a director is confirmed, which is not likely to happen before the July 21, 2011 Dodd-Frank implementation date when the bureau officially opens its doors.
While the Obama Administration said that the CFPB’s ability to oversee these non-bank product is key to reigning in the previously unregulated “shadow banking” industry, House Republicans continue their attacks on the bureau, and have vowed to go to any lengths necessary to block President Obama from naming Elizabeth Warren as the bureau’s director through a recess appointment. Rep. Patrick McHenry (R-NC) said he is concerned that the CFPB will have “virtually unchecked” power.
The CFPB is currently seeking comment on how it should supervise non-bank firms. The comment period will be open until mid-August, and the final regulations must be in place by July 21, 2012, according to the Dodd-Frank Consumer Protection and Wall Street Reform Act.
