CFPB Launches Registry to Crack Down on Repeat Corporate Offenders

The USA's consumer watchdog is taking new steps to rein in financial companies that repeatedly violate the law. On Monday, the Consumer Financial Protection Bureau (CFPB) finalized rules to create a public registry of non-bank firms that engage in illegal practices like predatory lending, deceptive fees and other consumer abuses.

The new registry requires offending companies to self-report any federal, state or local law enforcement orders against them related to consumer financial laws. Firms under CFPB supervision must go further by providing written attestations from executives confirming they are complying with such orders.

"Too many American families have been harmed by corporate repeat offenders in a rinse-and-repeat cycle of illegality, where bad actors see fines and penalties as the cost of doing business," said CFPB Director Rohit Chopra. "This registry will expose and deter the financial sector's worst actors that too often treat penalties as just the cost of doing business."

Under the new rule, covered non-bank companies will be required to register with the CFPB by reporting certain final orders or judgments related to consumer finance laws, including providing written senior executive attestations confirming compliance for firms under CFPB supervision.

Chopra said the registry will enhance the CFPB's ability to "monitor and track repeat offenders in order to better hold them accountable if they break the law again."

The registry follows the 2010 Dodd-Frank Act which expanded CFPB authority beyond just banks to include mortgage companies, debt collectors, student loan servicers and other non-bank financial firms that had previously lacked consistent federal oversight.

Chopra cited examples like the formerly prolific subprime mortgage lender Ameriquest as underscoring how risky non-bank activities can be left unchecked without proper monitoring tools like the new registry.

For compliance teams at non-bank firms, the registry requirements mean ensuring any applicable law enforcement orders involving consumer financial products and services are properly reported to the CFPB. Firms under CFPB supervision will need to implement processes for certifying compliance through senior executive attestations.

The new registry represents just one element of the CFPB's intensified focus on preventing repeat corporate offenses under Chopra's leadership. The agency has established a dedicated Repeat Offenders Unit to enhance monitoring and is pursuing tougher remedies beyond just civil penalties when companies violate orders.

"Our final rule to create a registry to detect and deter repeat offenders will play a key role in this work," Chopra stated.

Compliance professionals should ensure their firms have proper procedures in place to carefully track and comply with reporting requirements for any covered law enforcement orders. The CFPB made clear it views the new registry as a critical tool for monitoring corporate compliance and preventing further consumer harm from repeat lawbreakers.

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