The Consumer Financial Protection Bureau (CFPB) on October 29, 2025, issued a final rule rescinding its earlier regulation that mandated certain nonbank entities to register public agency and court orders tied to consumer financial products or services. This decision, published in the Federal Register, reverses a rule effective from September 16, 2024, which aimed to centralize information for monitoring risks to consumers. The rescission is driven by the Bureau's assessment that the original rule's costs to entities and the government outweighed its speculative benefits, such as tracking unquantified recidivism. Effective immediately upon publication, the move relieves nonbanks of registration and reporting duties, potentially affecting thousands of entities while preserving other regulatory tools for consumer protection.
Background on the Original Rule
The CFPB adopted the Nonbank Registry (NBR) Rule on July 8, 2024, under authority from the Consumer Financial Protection Act (CFPA). It required nonbank covered persons—entities offering consumer financial products like credit, leasing, or debt collection—to register public orders imposing obligations based on violations of covered laws, including federal consumer financial laws and certain state statutes. As detailed in the rule, nonbanks had to submit identifying information, order details, and updates on modifications or terminations. For orders published on the Nationwide Multistate Licensing System (NMLS), a simplified one-time registration option was available.
The rule also imposed annual reporting on supervised nonbanks, requiring an attesting executive to submit a written statement on compliance steps and any identified noncompliance. The CFPB estimated this would burden entities with over 271,000 hours of paperwork initially, costing between $350 and $2,100 per order cycle, and annual government maintenance at $2.5 million plus 10,400 staff hours. Publication of registry data was authorized but discretionary, intended to enhance monitoring of risks like recidivism.
Reasons for Rescission
The CFPB's decision to rescind rests on multiple factors. Primarily, the Bureau concluded that the rule's benefits were speculative and unquantified, failing to justify costs to regulated entities, which could pass to consumers. The original rule emphasized addressing recidivism, yet provided limited evidence, citing only a handful of Bureau enforcement actions without data on prevalence or severity. As stated in the rescission, 'the NBR Rule provided no data on the prevalence of public agency and court orders against covered nonbanks, and only vague, limited information about the prevalence of recidivism.'
Duplication with existing systems like NMLS was another key concern. The rule required registration of already public orders, overlapping with state and federal databases. Commenters, including industry associations and state regulators, highlighted this redundancy, noting that NMLS already captures much of the information. The Bureau agreed, stating that it 'has access to the NMLS and can directly access these orders without requiring those entities subject to them to submit them.'
Costs to the Bureau itself, including $2.5 million annually for operations, were deemed unjustified, especially amid budget constraints. The rescission also addresses burdens from written statements, which exposed executives to liability and hindered recruitment of compliance professionals.
Public Comments and Consultation
The CFPB received 16 comments on the proposed rescission, with support from industry groups, the Small Business Administration's Office of Advocacy, and state regulators, who viewed the rule as burdensome and unnecessary. Critics argued it duplicated NMLS and other sources, potentially deterring settlements. Two nonprofit groups opposed, claiming the registry would enhance transparency and deter misconduct, but provided no quantifiable evidence.
The Bureau consulted federal agencies like the Federal Reserve and state entities, including tribal governments, as required by the CFPA. No significant opposition emerged from these consultations.
Legal Authority and Analysis
The rescission invokes the same CFPA sections used for the original rule, including 1022(b) for rulemaking and 1024(b) for supervision. The Bureau's 1022(b) analysis found rescission benefits nonbanks by reducing compliance costs—estimated at $360 per firm for registration and $1,440 plus $720 for reporting and recordkeeping—without significant consumer harm, as orders remain public elsewhere. It affects an estimated 1,550 to 7,752 nonbanks, with no major impact on small entities or rural consumers.
The rule is effective immediately, citing Administrative Procedure Act exceptions for relieving restrictions and good cause.
Implications for Stakeholders
For nonbanks, rescission eliminates registration deadlines—January 14, 2025, for larger participants, and later for others—saving time and reducing legal risks. Supervised entities avoid attestation burdens, potentially easing hiring. Consumers may see indirect benefits from lower entity costs, though the Bureau notes minimal price passthrough. Regulators retain access to public orders via existing channels, maintaining oversight without a new federal database.
The action aligns with broader policy shifts, including a reduced Bureau budget cap, emphasizing efficient resource use over expansive registries.