The Consumer Financial Protection Bureau (CFPB) issued an Advanced Notice of Proposed Rulemaking (ANPR) seeking information to assist it in considering whether to propose a rule to amend the test to define larger participants in the consumer reporting market established by the Bureau’s Defining Larger Participants of the Consumer Reporting Market Final Rule published in July 2012.
Comments are due by September 22, 2025. The ANPR can be found here.
Summary
Section 1024 of the Consumer Financial Protection Act (CFPA) gives the Bureau supervisory authority over “larger participants of a market for other consumer financial products or services as defined by the rules.” To date, the Bureau has issued six rules defining larger participants of markets for consumer financial products and services.
The Bureau’s Larger Participant final rule defined a consumer reporting market that covers consumer reporting agencies selling comprehensive consumer reports, consumer report resellers, and specifically consumer reporting agencies. It established that nonbank covered persons with more than $7 million in annual receipts resulting from relevant consumer reporting activities would be considered larger participants in this market. Covered persons meeting the test qualify as larger participants and are subject to the Bureau’s supervision authority.
The Bureau is concerned that the benefits of supervisory authority over nonbank covered persons with more than $7 million annual receipts resulting from relevant consumer reporting activities may not justify the costs of increased compliance burdens for many entities that are considered larger participants under the current test. In particular, the Bureau is concerned that smaller businesses that now qualify as “larger participants” under the final rule may be disproportionately impacted. In addition, the Bureau is concerned that the pool of entities subject to supervision may be too broad and will divert limited CFPB resources.
As a result, the Bureau is seeking comments on the following topics and questions to determine if it should amend the test to determine larger participants in the consumer reporting market.
- Is $7 million in annual receipts resulting from relevant consumer reporting activities an appropriate threshold for determining which entities should be considered larger participants in the consumer reporting market? If not, what threshold is appropriate and why?
- How would consumers be impacted by a potential increase in the threshold? Submissions of data related to the benefits/costs to consumers of the current rule and any particular change to the threshold are encouraged.
- How would changing the current threshold for larger participants alter the behavior of participants in the consumer reporting market? How would these changes benefit or harm consumers and participants? Would those changes in behavior have impacts beyond this specific market?
- How would changing the current threshold for larger participants affect the Bureau’s ability to address potential market failures in the consumer reporting market and related areas?
- What are the costs to covered entities that are specific to the Bureau’s supervisory authority for larger participants in the consumer reporting market?
- What are the costs to covered persons from being a larger participant that are not specific to the Bureau’s supervisory authority, but are specific to being a larger participant in the consumer reporting market? For instance, are there costs to consumer reporting firms of monitoring larger participant status, or costs related to complying with relevant Federal statutes/regulations beyond what the firm would find reasonable absent the possibility of supervision?
- Are there costs to covered persons from the current larger participant rule that specifically apply to firms whose annual receipts are lower than, but close to the threshold?
- Are there costs/benefits to consumers, including rural consumers, servicemembers, and veterans, of raising the larger participant threshold?
- Do small business concerns, as defined by the SBA, or other smaller or midsize entities qualify as larger participants under the current threshold in this market? Do these entities incur costs of compliance with their larger participant status that are not in proportion to their size relative to other larger participants in the consumer reporting market?
- Should the Bureau’s test for defining larger participants in the consumer reporting market account for the SBA’s size standards? If so, how?
- Are there significant recordkeeping requirements that would be reduced by raising the larger participant threshold?
- What other specific costs or benefits, not mentioned above, would a change in the larger participant threshold have for consumers and covered persons?
- Should the Bureau rely upon Economic Census data, SUSB data, or other sources of data to information estimates of the current size of the firms in the consumer reporting market and the number of firms that may qualify as larger participants? What additional sources of data, if any can reliably inform such estimates?