CFPB Non-Bank Registry rule: another layer of unnecessary oversight

ARM industry members who are operating under enforcement orders from the CFPB or any other federal or state agency are facing submitting company information as well as copies of the orders on the CFPB’s Nonbank Registry. Large-market participants get to go first and may register starting October 16, assuming that the registration website is available by that date. In the meantime, because the CFPB has published its Nonbank Registration Filing Instructions Guide, anyone who is bound by the rule can prepare for their submission by compiling the information necessary for registration as a user on the Registry site, and for the actual registration of their Order(s). This 71-page behemoth work instruction seeks to help registrants to register their company accurately and completely, and then to properly identify, classify, and upload their relevant orders.

Keep in mind that once you start to enter information into the portal, whether you are registering your company, creating a password, or entering and managing your orders, if you leave the site, close the site or refresh the site, you will lose all of the information you have input. There is no mechanism to save your work and come back later. That’s why I advocate a process I’ll steal from French cooking—mise en place–which means reading the entire recipe, then gathering up and preparing all the ingredients, so that when you have the heat on, you are ready to go. Identify the information that applies to you and have it at hand. For example, you will need identifying information that you might not normally use very often, such as any of the following if they are applicable to your company: LEI, Taxpayer ID Type, Taxpayer EIN, NMLS ID, RSSD ID, EDGAR CIK and HDMA ID. You’ll need all of these that are applicable to your company.

Before you get started, be sure you know who is going to be the point of contact for your company related to your registry entry. The manual makes it clear that the POC is the person who will receive email correspondence related to the portal entries. The POC can also designate company users—others who may be responsible for administration or updates to the company’s information.

Use the same diligence in gathering information about the enforcement Orders that you have to register. You will need details such as docket, case or tracking number assigned by the court or government entity issuing the order, a list of the specific laws the order alleges were violated, the jurisdiction of the court, and the type of court, effective date of the order, expiration date, information about the government entity that issued the order if it’s not a court order, and more. If you have multiple orders, you’ll be entering this information for each order. You will need a clear and fully executed PDF file of each order to upload as well.

This article does not provide a complete list of the information you will be providing in the portal. Our goal is to emphasize that completing registration and entering the orders is a detail-oriented process that will take time. Changing the information you have entered after the fact, depending on what you need to change, may require opening a Support Ticket with the CFPB help desk, the email address for which is provided in the manual. This is a job where doing it right the first time is preferred. The CFPB has offered free training sessions that cover how to complete the form. One has already occurred, and the second training is scheduled for Wednesday, October 9 at 1:30 pm Eastern. To register for the event, click here.

The Nonbank Registration Filing Instructions Guide can be obtained here.

insideARM take: 

Frankly, any process that requires a 71-page instruction manual for its users should be simplified. The information it requests is available to the CFPB via public searches in PACER, the court system websites, state regulator websites, NMLS, the through the non-public Sentinel database, and through its relationships with regulators in all 50 states. We realize that the CFPB wants to create a one stop shop for information about past enforcement actions to which financial services organizations have been subjected, but it seems like overkill. The fact that an organization has been subjected to enforcement in the past does not mean that it is a bad actor now. Tainting a new relationship with a consumer with potentially irrelevant information of which companies may be required to inform consumers seems to have an underlying detrimental purpose.