Consumer Financial Protection Bureau (CFPB) Outlines Role

According to a Consumer Financial Protection Bureau (CFPB) announcement, the agency will oversee debt-collection firms and prepaid-card companies. It also asked for public comment on which nonbank financial firms it should oversee.

Among the other areas the agency plans to police are consumer reporting, consumer credit and related activities, money transmissions, check cashing, and debt-relief services. The CFPB also may oversee auto and personal loans. Sources indicate the agency is considering a registration process for those types of firms the agency will be responsible for regulating. However, the agency cannot regulate nonbank firms until a permanent director is in place, which may be impossible given Senate Republicans' pledge to block any nominees unless changes are made to the agency's structure.  

Republicans have proposed replacing the director position with a five-member commission and ensuring that the CFPB is beholden to the congressional appropriations process. Business groups, which have criticized the agency and its powers, say it is too soon to tell how the oversight system will ultimately shake out. "It's unchartered territory," says Bill Himpler, executive vice president of the American Financial Services Association. Himpler has urged the CFPB to piggyback on existing state oversight rather than develop a completely new regulatory system.