Mar. 3: CFPB Updates This Week

NASCUS Summary: Registry of Supervised Nonbanks that Use Form Contracts To Impose Terms and Conditions That Seek To Waive or Limit Consumer Legal Protections

12 CFR Part 1092 

The Consumer Financial Protection Bureau (CFPB) is issuing this proposed rule to require that nonbanks subject to its supervisory authority, with limited exceptions, register each year in a nonbank registration system established by the CFPB information about their use of certain terms and conditions in form contracts for consumer financial products/services that pose risks to consumers.

Comments must be received by April 3, 2023, and the proposed rule can be found here.
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CFPB Publishes New Findings on Financial Profiles of Buy Now, Pay Later Borrowers

The CFPBhas published a new report analyzing the financial profiles of Buy Now, Pay Later borrowers. While many Buy Now, Pay Later borrowers use the product without noticeable indications of financial stress, the report finds that Buy Now, Pay Later borrowers are more likely to be active users of other types of credit products like credit cards, personal loans, and student loans. They are also more likely to exhibit measures of financial distress than non-users. For example, Buy Now, Pay Later borrowers are more likely to be highly indebted or have revolving balances or delinquencies on their credit cards compared to consumers who do not use Buy Now, Pay Later products. Buy Now, Pay Later borrowers are also more likely to use high-interest financial services such as payday loans, pawn loans, and bank account overdrafts. The report follows previous CFPB research on the Buy Now, Pay Later market.


CFPB Announces Appointments of New Advisory Committee Members

The CFPB announced the appointment of new members to the Consumer Advisory Board, Community Bank Advisory Council, Credit Union Advisory Council, and Academic Research Council.

The Dodd-Frank Wall Street Reform and Consumer Protection Act charges the CFPB with establishing a Consumer Advisory Board to provide advice on a variety of consumer finance issues. Members of the Consumer Advisory Board represent the various districts of the Federal Reserve System. Each member appointed to the Consumer Advisory Board was recommended by a president of a Federal Reserve Bank.

In addition, the Community Bank Advisory Council and Credit Union Advisory Council advise and consult the CFPB on financial issues related to community banks and credit unions. The Academic Research Council engages on the strategic research planning process and research agenda, and provides feedback on research methodologies and collection strategies.


New CFPB Issue Spotlight Examines High Fees that Chip Away at Public Benefits

The Consumer Financial Protection Bureau (CFPB) released a new issue spotlight examining how the financial products used to deliver public benefits, like Social Security and unemployment compensation, affect individuals’ ability to fully access the assistance provided through those programs.


The CFPB is in the final stage of review of an application regarding consumer disclosures of a loan that finances both a construction phase and the permanent purchase of a home. In its application, the Independent Community Bankers of America (ICBA) states it is not uncommon in rural communities for first-time homebuyers to build their first home because there are limited existing affordable “starter” homes. The application seeks to adjust the existing mortgage disclosures to facilitate the offering of these products. The ICBA believes that consumer understanding of construction loans would be improved by disclosures that it views as more specifically tailored to such loans. If this “template” application is approved, individual lenders can then apply to enroll in an in-market testing pilot. As indicated in the TDP Policy, however, a template is non-operative, i.e., it does not provide permission to conduct a trial disclosure program to any party, and it does not bind the CFPB to grant individual applications.

The CFPB is making the application available to the public for inspection. View the application for construction loan disclosures.

Seeking public comments

In addition to making the application available to the public, we are seeking input from consumers, lenders and other stakeholders who have experience with construction loans .

Submissions will be accepted until March 29, 2023. You may submit information and other comments, identified by Docket No. CFPB-2023-0016, by any of the following methods:


CFPB Shuts Down Mortgage Loan Business of RMK Financial for Repeat Offenses Against Military Families

Today, the Consumer Financial Protection Bureau (CFPB) permanently banned RMK Financial Corporation, which does business as Majestic Home Loans, from the mortgage lending industry by prohibiting RMK from engaging in any mortgage lending activities or receiving remuneration from mortgage lending.